The story begins during the reign of the last king of Narnia, King Tirian, great-grandson of the great-grandson of Rilian, son of King Caspian X. Narnia has experienced a long period of peace and prosperity begun during the reign of King Caspian X. The book begins as a Centaur, Roonwit, comes to warn Tirian of strange and evil things are happening to his land and that the stars portend ominous developments.
An ape named Shift has persuaded a well-meaning but simple donkey called Puzzle to dress in a lion's skin, and pretend to be the Great Lion Aslan. Puzzle, though reluctant, is tricked by Shift's assertion that it is not Shift but Aslan himself who is making the request of Puzzle. Shift, using Puzzle as his pawn, convinces the Narnians, both human and animal, that he speaks for Aslan. Once the Narnians have been convinced that Aslan has returned, Shift orders the Narnians to work for the Calormenes, and to cut down talking trees for lumber. The money will be paid into "Aslan's" treasury, held by Shift, on the pretext that it will be used for the good of the Narnians.
King Tirian and his friend Jewel the Unicorn at first also believe the rumors of Aslan's return, but realize the lie when they hear Shift telling the Narnians that Aslan and the Calormene god Tash are one and the same. When Tirian accuses the ape of lying, the Calormenes overpower the king and bind him to a tree. He calls on Aslan for help, and receives a vision of Digory Kirke, Polly Plummer, Peter Pevensie, Edmund Pevensie, Eustace Scrubb, Lucy Pevensie and Jill Pole, though he does not know who they are. The people in the room can also see him and, though Tirian can't speak to them, they guess that he's a messenger from Narnia. A few minutes later by Narnian time, Jill and Eustace arrive in Narnia. They release the King, rescue Jewel and Puzzle. A band of dwarfs are also rescued, but because their faith in Aslan has been shattered they refuse to help, claiming "The dwarfs are for the dwarfs." Only one dwarf, Poggin, is faithful to Tirian, Aslan and Narnia and he joins them. Tirian and his small loyal force prepare to fight the Calormenes.
As the battle progresses, all of the animals are killed (many by the dwarfs, who attack both sides), and Eustace, Jill, all the surviving dwarfs, and Tirian are thrown into the stable where the false Aslan is kept. They find instead a very real Tash, and escape. Tirian throws Shift into the stable. Tash swallows Shift whole. Tirian drags Rishda Tarkaan, the leader of the Calormenes, into the stable. Much to the Calormen leader's surprise and terror, a very real Tash appears, and snatches him up under an arm. Peter, Edmund, Eustace, Lucy, Jill, Polly, and Digory appear before them, and Peter orders Tash to leave. (Susan, who "grew up", is said to be "no longer a friend of Narnia," and therefore is not with them). Aslan appears and as they watch at the stable door, all of the people and animals, including those who had previously died, gather outside the barn and are judged by Aslan. Those who have been loyal to Aslan, or to the morality upheld by Narnians, join Aslan in Aslan's Country. Those who have opposed or deserted him do not pass through the door; rather, they become ordinary non-talking animals and fade into shadow and vanish. As the children watch, all the vegetation is eaten by dragons and giant lizards, and Father Time calls all the stars down from the skies into the sea, which rises to cover Narnia. Peter closes the door, and Aslan leads them away to his country.
All those who had traveled to Narnia in previous books are now reunited in Aslan's country; they have died on Earth in a railway accident. It is revealed that Aslan's country is the Platonic ideal of Narnia, or the real Narnia of which the Narnia they'd visited was a mere shadowy reflection.
The time that they are in represents what some people interpret as the Tribulation. The ape Shift represents the Antichrist, and his rule resembles modern totalitarianism. His claim that "true freedom means doing what I tell you" is based on Rousseau's "General Will". In one of the most moving parts of the book, Tirian and the Unicorn, while still believing in the ape's Aslan, agonize over the fact that he is apparently commanding evil, "as if the sun rose one day, and it was a black sun".
The Calormene chief may represent the False Prophet in Christian Apocalyptic prophecies. Tash also represents the Devil (called the dragon in Revelation) in the sense that the Antichrist compares him to God, and the people following him accept it and give him praise as 'Tashlan'. The destruction of the world, Narnia, the children, the Talking Beasts, and all that entered Aslan's Country represents the destruction of the old heaven and earth and the creation of the new one, as told of in the Book of Revelation, a Christian Text. Furthermore, the appearance of Father Time in the Dead Narnia could be a representation of the fact that there is no time in Aslan's Country (Heaven), and thus another Christian reference.
There is also a point where two soldiers of Calormen are found in Aslan's Country. The first is taken by Tash, because he never actually believed in him and thus had false faith. The second is found confused in Aslan's Country, because he had served Tash faithfully and believed in him and been a good man by how he grew up, and yet was forgiven by Aslan, saying that 'all service done unto Tash has been done unto me'. This shows an interesting balance on the question of the relation of different religions, a position known as soteriological inclusivism: while men of different religions may share in the Kingdom of Heaven if they receive spiritual truth instead of rejecting it, that does not imply the equal truth of those religions (a position of religious pluralism, which Lewis rejected). The selling of the Narnians into slavery is also possibly metaphorical. It could possibly be a reference to the crossing of the Kings over the dried Euphrates in Revelation, because afterwards good and evil have their final battle in Narnia. It could also possibly be a reference to the Mark of the Beast, because those who believed this was Aslan's will (to be sold into slavery) went willingly.
Lewis has been criticised, by Philip Pullman and others, over the values conveyed by The Last Battle. In particular, many are critical of how Susan Pevensie, one of the children who appeared in previous stories, is described as "no longer a friend of Narnia" as she is interested only in "nylons, lipstick and invitations". In response to such criticisms many of Lewis's supporters say that such items are not necessarily symbols of female sexual maturity, but mere symbols of commercialism and materialism — both of which Lewis and his close friend J. R. R. Tolkien, saw as evils. "Nylons and lipstick" are not evidence of sexual maturity; in this case, they seem to indicate shallowness or vanity. Similarly, it was responded that she wishes her life to be simplistic, and living in and believing in Narnia cannot be accommodated in that reality. Polly Plummer says that Susan's "whole idea is to race on to the silliest time of one's life as quick as she can and then stop there as long as she can."
Some would also claim that Susan is excluded from Narnia simply because she doesn't believe in Narnia any longer: Lewis is alluding to loss of faith, and of imagination, when we fail to retain "childlike" simplicity. This could be said to be lend negative connotations to faith, suggesting that to believe, one's mind must remain childish and simplistic. This would be an inadvisedly literal interpretation of one of Jesus' teachings, "Verily I say unto you, except ye be converted and become as little children, ye shall not enter into the kingdom of heaven." (Matt 18:2-4, KJV) and Lewis briefly mentions misconceptions of this verse in Mere Christianity. The 'growing up' mentioned seems to imply that Susan doesn't have the right attitude in respects to Narnia and as such cannot go there. Others claim she does not enter Narnia with the others because she was not killed in the train crash, and that she, too, will make it there when her time comes to die. The implied misogyny is also contradicted by the generally good representation of females in the Chronicles of Narnia, through Jill Pole, Polly Plummer, the Calormene girl Aravis Tarkheena, and especially Lucy Pevensie, Susan's younger sister.
Accusations of racism stem from the fact that the Calormenes, the enemies of Narnia, are thinly disguised caricatures of Arabic culture. They are dark-skinned, wear turbans and live in an arid land south of Narnia. In contrast, the humans of Narnia are light-skinned. The Calormenes are seen as repulsive, dirty people who follow the god Tash, a satanic figure that takes away the souls of the wicked characters and demands evil deeds as a service to him. It is worth noting that while most of the protagonists in the Chronicles are light-skinned, the dark-skinned people are not seen as entirely evil. Some Narnians are evil, and some Calormenes are good. In fact, one of the better-developed characters in The Last Battle is an emphatically good Calormene, Emeth, whose name is the Hebrew word for "truth." Thus Lewis denotes Emeth as one who prizes objective truth above all, and Jesus revealed: "I am the Truth" (John 14:6). Therefore Emeth (lover of Truth) ignorantly served the demon Tash but did so as a Narnian might well serve the True God Aslan — dutifully and with love and devotion, to the best of his knowledge interacting receptively with any truly divine light given him — and was thereby allowed to ascend to Aslan's perfect Narnia. Most antagonists in the Chronicles, such as the White Witch, are light-skinned as well.
The train accident, described in chapters 5 and 13 of The Last Battle, in which the characters from our world (Peter, Edmund, Lucy, Digory, and Polly) perish has several parallels to the Sutton Coldfield rail crash that took place on January 23, 1955. In both cases, a passenger train bound for Bristol derailed while entering a station around a curve at excessive speed, causing several fatalities. In Lewis’ chronology of Narnian events, however, the train derailment in The Last Battle took place in 1949.