Season seven deals with the Potential Slayers, normal girls around the world who are candidates to succeed the Slayer upon her death.
It is revealed that Buffy's resurrection caused a instability which allows The First Evil, a spiritual entity that Buffy encountered in the third season, to begin tipping the balance between good and evil. It has inactive Potential Slayers hunted and killed by Caleb, a sinister and misogynistic preacher turned serial killer who heads a cult called Bringers, who worship The First as a god. Inside the Hellmouth it raises an army of Turok-Han, an ancient and powerful sub species of vampire. Caleb destroys the Watchers' Council.
Dawn begins her sophomore year at high school. Buffy gets a job at the rebuilt Sunnydale High, where she meets the new principal, Robin Wood, vampire hunter and son of deceased Slayer Nikki Wood. Buffy also reunites with Willow, who with help got over her emotional rampage in the previous season, and Spike, who earned his soul back but is temporarily driven mad by regret.
Willow begins to emotionally heal from Tara's death and finds solace with a Potential Slayer named Kennedy. They immediately start going out before Kennedy can fully understand Willow. Their relationship is strained when Willow drains a significant portion of her life force to reopen a portal for Buffy, but they soon reconcile.
Andrew Wells and Jonathan Levinson return to Sunnydale after The First convinces them to help open the Seal of Danzalthar. In the process, Levinson is killed. Andrew is captured by the Scoobies, who show resentment to him. Andrew soon becomes comic relief until he attempts to make a documentary on the Scoobies, but Buffy scolds him into seeing the seriousness of their situation. Andrew then becomes a committed ally of the Scoobies.
Anya and Xander break up for good after a demon named Halfrek gets her to kill a group of frat boys. Buffy and Anya fight while Willow summons D'Hoffryn, who questions Anya. Anya requests that her latest vengeance be reversed. Halfrek is killed and Anya is turned human once more.Spike is driven mad by The First, and soon it also gains control of him for a time. The First also reveals that Spike killed Robin Wood's mother, sparking a vendetta. Robin makes an attempt on Spike's life. Buffy saves Spike and angrily shuns Robin. Ironically, this attack frees Spike from his insanity. Buffy finds out that Giles was part of the scheme, and becomes angry at him, but they soon make peace.
Willow helps track the Potentials in Sunnydale and a number of them, brought by Giles, take refuge in Buffy's house. Dawn at first believes herself to be a Potential, but becomes disappointed when she finds that is not the case. Xander cheers her up saying she's anything but ordinary. The now human Anya also joins them; while she and Xander still love each other, they don't get back together.
A reformed Faith returns to Sunnydale to help fight The First. When Buffy leads the Potentials to attack Caleb and his allies, Xander loses an eye in the fight. The Scoobies and the Potentials begin to question Buffy's leadership skill. They mutiny against her, led by Faith. Xander takes Dawn out of Sunnydale. Spike, however, stays loyal to Buffy. Buffy finds an ancient weapon, known as the Scythe, that was designed for the Slayer. Buffy soon reconciles with Faith after saving the lives of Faith and the Potential Slayers in a fight against several Turok-Han.
As the Hellmouth becomes more active, nearly all human and supernatural creatures flee Sunnydale. Buffy and her allies stay behind in an effort to defeat The First. Robin Wood returns to join this cause and even accepts Spike.
In the series finale, Dawn returns to help fight the First. Angel leaves Los Angeles and comes to Sunnydale with an amulet, which Buffy gives to Spike. Buffy finally kills Caleb by cutting him in half with the scythe. While Caleb is dead, they make their move to thwart The First's plans once and for all. The Potentials descend into the Hellmouth to fight an army of Turok-Han, while the other Scoobies hold off the few Turok-Han that escape into the halls of Sunnydale High. Willow uses a spell that activates all the Potential Slayers, granting them Slayer powers. Anya is killed in the fight, along with some of the new Slayers. The First returns to taunt Buffy saying her fight is in vain. Refusing to let the world be destroyed, Buffy and her allies put up more of a fight and begin to gain the upper hand. Spike's amulet channels the power of the sun and kills all of the Turok-Han in the Hellmouth, but Spike himself is also consumed. Buffy tells Spike she loves him; he tells her to run. The Hellmouth collapses, and the resulting crater swallows all of Sunnydale. The survivors of the battle escape on a school bus, which Buffy catches up to after saying goodbye to Spike.
In the last scene of the series, the survivors gather on the rim of Sunnydale's crater. The Scoobies and new Slayers tend to the wounded. Xander mourns Anya's death and is consoled by Andrew. Dawn asks what their next move is and Buffy smiles.