The episode opens where last week left off: Nyssa is holding her bow on Oliver and Roy, demanding to know where Sara is. She quickly deduces that Sara is dead, and Oliver apologizes.
Nyssa knows that Sara was killed with an arrow, and wants to see the body. Oliver tells her where to find it and, when she leaves, tells Roy to follow her.
Oliver goes to meet Thea at a restaurant; she's found investors to help her reopen Verdant. Oliver is happy for her, and says she seems different, stronger. He asks if she's seeing someone or anything. She evades.
Flash back to Hong Kong; Oliver is tracking a target -- a tourist who's buying ice cream. Waller wants him taken out.Oliver doubts the man is a terrorist, and demands to know why Waller wants him dead. Maseo says he asks too many questions.
At Sara's grave, Nyssa and Laurel have an argument after Laurel refuses Nyssa's condolences. Afterwards, she heads to the safe house where she's staying in town; Oliver has Roy send him the address, and he goes to talk to Nyssa. The pair argue a bit, but ultimately connect over Sara. Ultimately, Nyssa tells Oliver that Sara was there after having heard rumors that Merlyn is alive.
At the Foundry, Nyssa reveals that Moira had turned Malcolm in to the League; Sara's camera had a memory card with recent pictures of Merlyn. Nyssa asks whether Sara had anything on her, and Roy says she had a blank piece of paper. They light a flame under it and the "ghost ink" shows back up, revealing among other things that she had at least considered talking to Lance.
Laurel comes to see Lance at the police department, asking Lance about Janson, the other name on Sara's paper. Lance tells her that he was looking into him for Sara; Nyssa comes to the police department, and tells Laurel she needs to tell Sara. While they argue about it, Lance comes to see them, and asks whether Sara is in town, too; Nyssa says she misses him. He gives Laurel and Nyssa the address he'd given Sara, and they find it's a Monastery. Janson was facing deportation to China and Merlyn bankrolled his defense. Roy, Diggle, Oliver and Nyssa split up and search the property.
As Oliver and Nyssa find the man they assume is Janson, Diggle and Roy find Janson's grave. It turns out the man they're tracking is Merlyn. Nyssa attacks him, but he fights back and evades her. Oliver gets a shot off, but only grazes Malcolm's shoulder before he gets away.
They return to the Foundry, where they tell Laurel what's happened. The arrow Oliver fired off at Merlyn was laced with nanotech -- a "tracer arrow." Laurel is upset that Oliver had a shot and didn't kill him, but Oliver says that's not who he is anymore.
In Hong Kong, Oliver kills the man Waller had sent him after, taking his keys after he falls.
Nyssa follows Laurel as she storms away, and Laurel finally treats Nyssa with respect. The two decide that Nyssa needs to get to Merlyn before Oliver does so that they can kill him.
At Verdant, Roy comes to see Thea, offering to help get the restaurant back up to speed.
On the streets, Arrow is tracking Merlyn to an abandoned factory. Merlyn isn't there, though, having tricked them. He wants to meet without masks, and in public. Merlyn meets him and denies killing Sara, saying that doing so would only make it worse for Ra's. He tells Oliver that Thea needs him -- that he saved her during Slade's attack and that Oliver was too distracted. He again swears that he's not Sara's killer.
Oliver meets up with Thea for coffee, warning her that Merlyn is alive. He tells her that if Merlyn were going to try to contact her, he would have done so by now. Her phone goes off and she excuses herself, saying it's one of her investors.
Back at the Foundry, Oliver tells Nyssa that he believes Merlyn when he says he didn't kill Sara. He reveals that Thea is Merlyn's daughter, and Nyssa stalks off to find him, believing that's why Oliver let him live. Oliver tries to follow her, but Diggle stops him, telling him that the world would be better without Merlyn in it, and that while he doesn't have to kill him, there's no sense in trying to stop Nyssa.
Back in Hong Kong, Maseo and Oliver are at Maseo's apartment. Tatsu is gone, because she hates Oliver. They argue about the nature of their missions, yet again. When Maseo steps away, Oliver bribes Maseo's son with candy to use his computer. He opens a drive that was on his victim's keychain. He tells Maseo that he wants to meet with Waller about a Ferris Air flight.
Back in the present, Thea and Roy are bantering outside Verdant when Nyssa comes up, incapacitating Roy with a dart and taking Thea away.
Merlyn returns home, looking for Thea in a panic, and he sees a plume of smoke from his window. Oliver and company see the same, and realize that's where they are. Nyssa has Thea tied up and hanging from the ceiling and they argue about whose father sucks more. Oliver rescues Thea and ends up sparring with Nyssa as a result. Merlyn shows up, telling them he wants to talk, but the three of them just end up fighting. Merlyn incapacitates Nyssa, and Nyssa demands Oliver kill him; Merlyn tells Nyssa that it wasn't him, implying it was Ra's al Ghul. He tells Oliver to go ahead and kill him if he doesn't believe him. He tells him that no prison will hold him; that his option is to kill him or let him go. Oliver doesn't kill him.
Back at the Foundry, Oliver still believes Merlyn didn't kill Sara; Nyssa hits him, and calls him foolish; she warns him that she's made an enemy tonight after he tells her that Merlyn is under his protection as long as he's in Starling and the League is not to make a move.
Back in Hong Kong, Oliver confronts Waller; the man he killed was Eddie Fyers' handler, and the flight on his USB drive was the one Oliver saved in Season One. Waller had ordered the flight be shot down in an attempt to kill China White, who is now in Hong Kong. Now, she's in Hong Kong and Waller wants to know why.
In the present, Laurel hammers away at a heavy bag at Wildcat Gym. Nyssa comes to tell her goodbye, telling her that she plans on following through on her promise to Sara. She instructs Laurel on form.
Lance calls Sara, saying he wants to hear her voice.
Oliver, and then Roy, come to check in on Thea following her kidnapping. Roy asks to work at the bar with her, and she tells him to stay on as an assistant manager. Her phone rings, and she says it's her designer; she leaves to take it and it's Malcolm.
In Nanda Parbat, Nyssa goes home and reports to her father that Merlyn is alive and in Starling. Ra's, in a tub, gets up. Nyssa reports that Sara was killed and she wants to kill Merlyn. Ra's says that he will die, but not for killing Sara, who was not truly one of them anyway. He asks about Oliver, and when Nyssa says he will protect Merlyn, Ra's says that Oliver courts war with the League.