The Yankee returns to Camelot, and the date is announced for his tournament with Sir Sagramor. A new law has been passed that says the participants may use any weapon they desire. The whole kingdom waits anxiously for this tournament, as Merlin has been aiding Sir Sagramor, and the competition has come to be looked upon as a duel between the two rival magicians. The Yankee looks upon the tournament as his chance to destroy knight- errantry once and for all. The Yankee enters the lists without armor or lance. Merlin places a veil over Sir Sagramor that is supposed to render him invisible to the Yankee while he remains visible to everyone else; the Yankee pretends to track his position by hearing.
The Yankee deftly maneuvers out of the way of Sir Sagramor's lance several times, to the delight of the audience. After toying with him for a while, the Yankee produces a rope and lassos Sir Sagramor, yanking him out of the saddle. Sir Sagramor leaves the field, and the other knights quickly elect Sir Hervis de Revel to take up the cause. The Yankee easily unseats him and several knights afterward, until Sir Launcelot himself enters the lists. The Yankee quickly unhorses the flower of all chivalry, to thunderous applause from the stands. To everyone's surprise, Sir Sagramor enters the lists again, this time without a lance but wielding his sword instead.
Merlin sneaks up and steals the Yankee's lariat. Merlin tells the king the Yankee's weapon was stolen from an undersea demon and magically disappeared after eight bouts, as the Yankee should have known it would. Sir Launcelot offers the Yankee his sword, but Sir Sagramor says the Yankee made his choice of weapon and could not be given another just because he chose poorly. The king reluctantly yields to this technicality and sends the combatants out to fight. The Yankee remains still as Sir Sagramor rushes toward him, and the crowd calls out for him to flee. He pulls out a revolver and shoots Sir Sagramor dead with one shot. Everyone is astonished at Sagramor's death, as there are no visible wounds, only a small hole in his armor.
The Yankee challenges all the knights of England to come against him all together or else he will proclaim them all vanquished. They are shocked, but after a moment, 500 hundred knights mount their horses and charge at him. The Yankee draws two revolvers and shoots down nine knights before the charge breaks in panic. The Yankee is master of the field; the institution of knight-errantry has been vanquished.
This is arguably the climax of the novel. The Yankee is confident but cautious as the tournament approaches; he realizes it is not a certainty that he will win. He refers to the tournament as a cast of the die and admits the possibility of becoming the victim of knight-errantry. The Yankee has not hidden his hatred for knighthood, and he knows that most of the knights of the kingdom would gladly kill him. Launcelot is a formidable foe, and the Yankee's defeat of him alone wins him the respect and adoration of many. Sir Madok's reputation rested on merely coming close to unhorsing Launcelot (as mentioned in chapter 20). The Yankee's thoughts turn to his nineteenth-century love before he faces Launcelot; he is still thoroughly tied to his former life and has as yet found nothing equivalent in the sixth century.
Launcelot shows himself to be a genuinely noble character and accepts his defeat gracefully. He even offers the Yankee his sword and tries to protect him from Sagramor's vengefulness. The Yankee admits that his victory in this section is not complete, as it is based on a bluff; if the knights had held their courage for two more shots, they would have easily killed him. He follows up in the next section with a more substantial challenge, but his goal of destroying knighthood by dishonoring it in this way seems flawed. Why, for instance, would his defeat of the knights cause a fundamental shift in people's perception on the world, instead of merely strengthening the existing superstition of the power of magicians?