Madara casts his Rinne Sharingan onto the moon and springs the world-wide genjutsu, dragging almost every living soul into a shared dream. Only Team 7 and the revived Hokage stay awake as the God Tree begins claiming the fallen.
With his Rinne Sharingan mirrored across the surface of the moon, Madara finally triggers the Infinite Tsukuyomi. A blinding glow washes over the battlefield, cutting short the clash between Tobi and the Allied Shinobi Forces and pulling nearly every living creature on the planet into a genjutsu no one can resist. Two groups escape it: Team 7, shielded inside Sasuke's Susanoo, and the Hokage brought back through Impure World Reincarnation.
Across the battleground, roots from the God Tree begin swallowing the immobilised shinobi one after another, wrapping them in bark even as Hiruzen tries to hold the tide back. Judging his vessel no longer useful, Tobi lets go of a shaken Yamato, who manages a short exchange with the Third Hokage before the dream takes him too. Elsewhere in Konohagakure, Minato stirs awake only to watch the village's residents seized by the same creeping roots.
Madara completes his plan by activating the Infinite Tsukuyomi through the moon-reflected Rinne Sharingan, ensnaring the world in a single illusion. Team 7 survives thanks to Sasuke's Susanoo, and the reincarnated Hokage remain conscious as well. The God Tree's roots start binding the trapped fighters, with Hiruzen unable to stop the process. Tobi discards Yamato, who is drawn into the genjutsu after speaking briefly with the Third Hokage.
Inside the dream, Yamato imagines himself leading Team 7 and treats the fantasy as where he truly belongs, never realising none of it is real. Minato regains awareness in Konohagakure and is horrified to see civilians overtaken by the spreading roots.
The episode's preview shows Kaguya solid against the sky, yet within the episode itself she appears see-through. The count of Naruto's remaining Truth-Seeking Balls differs from the manga, seven here versus six on the page, and Kabuto is drawn with his right horn still whole by mistake. Yamato's fate also diverges, since the manga has him already ensnared when released while the anime grants him a moment with the Third Hokage first. Minato's coat is corrected to five Truth-Seeking Balls after the manga mistakenly gave him six, and one oddity remains in that Hiruzen references Yamato's codename despite dying before it was ever assigned.

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The Infinite Tsukuyomi is the world-ending genjutsu Madara Uchiha triggers by reflecting his Rinne Sharingan across the surface of the moon, trapping nearly every living creature on the planet inside a single inescapable dream.
The Infinite Tsukuyomi ensnares almost all of humanity in an illusion no one can resist, and once victims are immobilized, the God Tree's roots begin creeping over their bodies to bind them, a process even Hiruzen Sarutobi is unable to stop.
No, "The Infinite Tsukuyomi" is not filler. The episode adapts manga chapter 677 and is part of the canon Birth of the Ten-Tails' Jinchuriki arc.
Team 7 escapes the Infinite Tsukuyomi by sheltering inside Sasuke's Susanoo, and the shinobi already revived through Impure World Reincarnation, including Hiruzen Sarutobi and Minato Namikaze, remain conscious as well.
Tobi discards Yamato once he is no longer useful. Yamato shares a brief exchange with the Third Hokage before the God Tree's roots draw him into the genjutsu, where he imagines himself still leading Team 7.
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