Although all the Clow Cards have been captured and Sakura is now the new mistress of the cards, mysterious magical events are still occurring in Tomoeda. Coinciding with these events is the appearance of Eriol Hiiragizawa, a seemingly well-mannered, charming exchange student from England.
While investigating one of these mysterious magical events, Sakura discovers that she can no longer transform the Clow key, which now looks like a star, into the Clow staff and even more alarmingly, she can no longer use the Clow Cards. It takes a traumatic ordeal in which Tomoyo, Kero-chan and Yue are trapped in water pillars for Sakura to figure out that in order to transform her new 'Star' key into a staff, she must use a new incantation. Furthermore, in order to use the Clow Cards, she must transform them into 'Sakura' Cards. Her new task is now clear: She must transform all the Clow Cards into Sakura Cards, something that is encouraged by the mysterious events occurring in Tomoeda, the source of which is still unknown.
Transforming the Clow Cards into Sakura Cards takes a lot of strength and magical ability, something that Sakura is still developing. She does her best to transform the cards as quickly as possible however, the Clow Cards are going 'cold,' meaning that if they are not transformed soon they will turn into ordinary cards. Upon hearing this from Kero-chan, Sakura goes transformation-happy and attempts to transform over eight cards at once. If a card is called on without a purpose, this can cause the card to go out of control as in the instance of Dash, who runs away after not being transformed properly. Following this, Sakura learns to only transform a card if she has a purpose for it.
Meanwhile, Syaoran is becoming more aware of his true feelings for Sakura, although he is still somewhat confused as to how he really feels towards her because of the 'feelings' he has for Yukito. After a confrontation with Yue in which Yue reveals that Syaoran is only attracted to Yukito due to his, Yue's, power of the moon, Syaoran's true feelings become apparent. The feelings he has towards Yukito are not genuine feelings of love whereas his feelings towards Sakura are.
Sakura gradually transforms Clow Card after Clow Card in Sakura Card and in the process, her magical ability grows stronger and stronger. However, it is still not strong enough to sustain Yue, who, unlike Kero-chan, cannot generate his own power and as a result, his borrowed form, Yukito, is fading away before Sakura and Touya's eyes. In order to prevent this, Touya surrenders all of his magical powers to Yue so he and Yukito will survive. Upon learning this, Sakura is also prompted to tell Yukito of her true feelings.
On a walk through the path of stars at the high school's festival, Sakura declares her love for Yukito who has always known of Sakura's feelings. Although he is flattered by Sakura's confession, he knows that her feelings are like those she has for her family and that he is not her number one person. As Sakura thinks about this, she comes to the realisation that Yukito is correct but there is also something else there; a feeling unlike those she has for Touya and Fujitaka. She can't tell Yukito this however as he has already found his number one person and Sakura believes that she can be happy if Yukito is happy, considering his number one person is her big brother, however she can't help but cry.
After several instances when mysterious magical events have occurred, Sakura, Syaoran, Kero-chan and Yue can all feel the presence of Clow Reed, although this seems impossible considering he has long since past away. In addition to feeling Clow Reed's presence, Sakura begins to have reoccuring dreams where she is flying over Tomoeda,eventually reaching the Tsukimine shrine. All of a sudden, the world becomes enshrouded in darkness, with both the sun and the moon becoming hidden. Standing atop the entry to the shrine is three mysterious figures: one with a similar form to Kero-chan, another with a similar form to Yue and a young, familiar boy.
Wanting to know why these events are occurring and to understand her dream, Sakura makes the decision to use the Return and visit the past in order to talk to Clow Reed himself. While in the past, Sakura witnesses the life Kero-chan and Yue shared with Clow Reed. She also witnesses Clow telling the guardians of his impending death and their reluctance to accept it. Every time Sakura attempts to ask a question however, Clow only motions for her to be silent and Sakura returns to the present without an answer.
After returning from the past, Sakura is then faced with Eriol, Nakuru and Suppi standing atop the entry to the Tsukimine shrine - just like her dream. Eriol, using the Sun staff, transforms Nakuru and Suppi into their true forms: Ruby Moon and Spinel Sun. Sakura is shocked and confused; she can't comprehend what is happening. Eriol reveals that he is the reincarnation of Clow Reed and that he is responsible for all the mysterious magical events that have been occurring in Tomoeda. All of a sudden, Eriol emits a ray of darkness into the sky, enshrouding Tomoeda in darkness, hiding the sun and the moon and putting everyone, including Tomoyo and Touya, into a deep slumber. Unless Sakura can transform the The Dark and The Light, the last two Clow Cards, into Sakura Cards, they, along with the rest of the world, will continue to sleep permanently.
Even though Sakura's magical ability has become quite strong, it is not enough to transform The Dark and The Light Cards, which must be transformed simultaneously. To assist her, Kero-chan and Yue offer to fuse with the Star staff in order to increase Sakura's power, however, if she fails, the two will become trapped within the staff. Sakura is reluctant at first as she doubts her own ability however, with the faith Kero-chan and Yue have in her, she agrees. The newly transformed staff appears to be able to transform the cards but it still not enough; The Dark and The Light will not transform. About to lose hope, Syaoran helps Sakura, even though he could fall into a permanent slumber, and together, the two transform the cards. Sakura is then able to use The Light to repeal the darkness. Afterwards, exhausted, Sakura and Syaoran fall to the ground and in Sakura's arms, Syaoran finally confesses his true feelings for Sakura, taking her by surprise.
The following day when Eriol doesn't come to school, Sakura learns that he will be returning to England. Sakura, Syaoran, Tomoyo and Kero-chan then pay a visit to Eriol's house, where everyone, including Ms, Mizuki, is waiting to hold a tea party in Sakura's honour. At the tea party, Eriol explains his motivations behind the events that have occurred and Sakura finally understands all that has happened and that she is now the mistress of the Sakura Cards.
Now that the mysterious magical events have ceased and all the Clow Cards have been transformed into Sakura Cards, Syaoran must return home to Hong Kong, even though he has still not received an answer from Sakura. On the day of Syaoran's depature, Sakura receives a phone call from Tomoyo letting Sakura know that Syaoran is leaving, something he neglected to tell her. After hearing this news, Sakura returns to her room and begins to cry. As the tears roll down her cheeks and hit the floor, a magical circle appears beneath Sakura's feet and a new Sakura Card is formed.
Sakura races to the airport where she is just in time to find Syaoran waiting in the departures lounge. Wei hands Syaoran the bear he made, and with a smile, Sakura's asks if she could have the bear. Syaoran then passes Sakura the bear.
THE END.
The third and final season of Cardcaptor Sakura consists of 24 episodes, making up the Sakura Card arc of the series. Each episode was preceded by the opening theme, Purachina performed by Maaya Sakamoto and followed by the ending theme, Fruits Candy performed by Megumi Kojima.