In the third season, Xana has been strangely quiet in both the real world and Lyoko, having done nothing during the group's summer vacation. It still needs a computer to exist, but is no longer limited to a specific one, instead being free to roam the Internet at will. Jeremy has developed a new scanning program capable of tracking Xana, which reveals that Xana appears to be residing in the United States, but lacks the means to strike against Xana. Jeremy's current goal at the moment is to find a way to transfer the group into the Internet.

Because Aelita had her memories returned by Franz Hopper, she can be devirtualized normally. She even has a new power to defend herself within Lyoko — energy fields. Also, Yumi has decided against having a relationship with Ulrich, preferring to remain just friends.

In Carthage, the group finds Lyoko's core, which Xana wants destroyed. Being free of the supercomputer, Xana's attacks are far more powerful. Tower activation is still required to initiate them, but Xana can perform attacks on levels far beyond what he could when imprisoned. Xana can possess mass numbers of people at once, making it that much more difficult for the group to make their way from the school to the factory. In the hopes of isolating the group from Carthage, since destroying Lyoko directly would prove difficult, Xana has turned his sights to Lyoko's sectors, hoping to remove their ability to access Carthage by deleting the sectors they use to get there. By using the Scyphozoa to possess Aelita, Xana can use her to enter the code "XANA" in a way tower. This gives Xana full access to the sector, after which he can delete it. Despite their best efforts, Xana eventually succeeds in deleting all four sectors. Luckily, Jeremy finds a way to access Carthage directly.

Seeing that their numbers aren't enough against Xana's increasing power, the group decides to add William Dunbar to the team to balance things out. However, a chain of events lead to only Aelita and William being able to make it to his first trip to Lyoko. Once they arrive, the two are separated, and Xana uses the Scyphozoa to possess William. Using William, Xana is easily able to overpower the other Lyoko warriors and destroy Lyoko's core. The act renders the supercomputer useless. Within the empty supercomputer, William is transformed into a dark version of himself, now possessed by Xana to an even greater degree. Afterwards, Jeremy gets a coded message from the internet from none other than Franz Hopper, who has somehow survived the destruction of Lyoko.