Alvarez Empire arc

The Alvarez Empire arc is the seventeenth story arc of Fairy Tail.

With Fairy Tail's revival accomplished, Mest Gryder reveals the disturbing truth about Makarov Dreyar's disbanding of the guild one year ago. The Seventh Master Erza Scarlet must face her greatest challenge as the new leader, as the guild is about to stand against the most terrifying threat yet, which even the Magic Council is desperately trying, but are barely able to stop. The military-driven Alvarez Empire from Alakitasia is poised to launch a full-scale war upon Ishgar to lay claim to Fairy Tail's secret artifact, Lumen Histoire.

A New Leader and the Overseas Threat
Five days after the formal restoration of the Fairy Tail Guild, the members begin construction of their new building in the crater, where their old building once stood. Leaderless, the members propose several ideas to locate the Sixth Master, Makarov, but others do not share their optimism. Levy finalizes the groundwork for the official re-establishment of the guild, thanks to her, Gajeel and Panther Lily's connections in the Magic Council. Since Makarov's whereabouts are unknown, Fairy Tail has to elect a Seventh Master to replace him. Meanwhile a typical brawl erupts between the guild members, until it is interrupted by an angry Erza. Levy quickly decides to make Erza the Seventh Guild Master, much to the latter's surprise, and the approval of a member no one seemed to remember: Mest Gryder; who also expresses that only Fairy Tail can save their Sixth Master, who is in an apparent dire situation.

Mest leads Erza to the basement of the Fairy Tail building, where Lumen Histoire is concealed in. Natsu, Lucy, Gray, Wendy, Happy and Carla follow them, despite being ordered not to do so. Mest then shares his memories about his undercover mission in the Magic Council. His main objective was to gain intelligence about the Western Continent, home of the Alvarez Empire, which attempted to invade Ishgar in X781 to obtain Lumen Histoire. With the Council devastated as of the Fairy Tail-Tartaros War, as well as the destruction of Face, Ishgar has been left without defense from an invasion from the West, prompting Makarov to disband Fairy Tail to protect them, then depart to the Alvarez Empire in order to negotiate with their authorities and stall them as long as possible.

The ones present at the Lumen Histoire's chamber decide to form a team and depart for the Alvarez Empire on a stealth mission to track down Makarov's whereabouts and bring him back home. Mest also describes the reformed Magic Council to be under pressure from the potential war threat from the West, just like their predecessors. At the same time, Gajeel manages to overhear their conversation from ground level and comes up with a plan to reform the B Team from the Grand Magic Games and find Laxus to complete it, apparently knowing where he might be. Meanwhile, Levy hands the documents regarding the Fairy Tail's legal status to Jura, finalizing the rebirth of the guild. Warrod is evidently happy with the news, although he silently expresses concern about Mest's plan. Wolfheim scolds Warrod for his cheery attitude, angrily reminding him about the Alvarez Empire's threat, but is stopped by Hyberion, who explains that the Alvarez problem must be dealt with peacefully, otherwise the resulting war would have disastrous consequences for Ishgar. Levy inquiries about the First God of Ishgar, God Serena, being on the side of Ishgar, only for Hyberion to state ominously that he defected to Alvarez to become a member of the personal guard of Emperor Spriggan: the Spriggan 12; whose members are on a level equal to his own.

Rescue Operation: First Contact at Caracol
Team Natsu sails to Alakitasia, although Mest notes that they have to make a stop at Caracol Island midway for resupply, since they need ten days to arrive at the continent. He also mentions that a spy is currently residing at the island, who might have intelligence about Alvarez. Elsewhere, Gajeel's squad arrives at the location where Laxus and his Thunder God Tribe was hanging around. Gajeel and Levy explain that the chances of successful infiltration of Alvarez are nearly non-existent, but the tactic of separating their teams could improve them. Back at the ship, Team Natsu prepares for a landfall at Caracol, but they notice Alvarez Navy's there as well. Natsu and Wendy overhear that Imperials are looking for a spy, and so, the entire crew disguises themselves as members of Cait Shelter. After being inspected, the guards let them through. A child is seen going after the soldiers, crying after his father. One of them draws a knife, trying to dispose of the boy out of annoyance, much to the populace's shock and Natsu's rage, who unleashes it alongside Gray, Lucy and Erza upon the Imperials.

Wendy, Happy and Carla decide to search for the child's dad, and Mest also joins to aid them, while the rest continues to hold off the marines. After their forces are defeated, Erza notes that another ship might bring reinforcements, and that they need to prepare, while she and Natsu are casually drinking at the bar owned by a man that intends to popularize Star Mangoes in Ishgar, completely unfazed with the ruckus. However, their rest is interrupted by a person that introduces himself as Marin Hollow, member of the Alvarez Army's Brandish Squad. Erza attempts to avenge the loss of the barkeeper, but finds out that she's unable to requip. Lucy attempts to summon a Celestial Spirit, but her abilities are nullified as well by the Spatial Magic. Marin then kidnaps the girls into what he refers to as his 'personal resting space' and returns an utterly beaten Mest, whose powers were also nullified. Natsu attempts to fight Marin, but he dodges his attacks and manages to land hits on both him and confused Gray, declaring himself as the ruler of space. Meanwhile, a woman scolds Marin for playing around, and he quickly compliments her, revealing that she is Brandish μ, member of the Spriggan 12 and his supervisor, while Natsu and Gray are terrified of the humongous amount of power they sense inside her.

Meanwhile, Team B has stopped off at a hot spring which happens to be owned by Blue Pegasus. There they meet Ichiya who reveals the Thunder Tribe joined with their guild after Fairy Tail's disbandment to Gajeel's chagrin as he wanted to save it as a surprise. In the scuffle, Gajeel is knocked into the woman's bath, where he lands on top of Levy to both their embarrassment.

Back at Caracol, Natsu and Gray prepare for whatever Brandish is going to do. But she surprisingly ignores them, complaining about not getting a Star Mango herself. Marin tries to direct her to the Fairy Tail members but she is not interested and tells him to release the girls, scaring him into doing so by causing the island to grow to everyone's surprise. As Brandish and Marin are about to leave, Natsu complains that Mest was hurt during the last fight, so Brandish seemingly disintegrates Marin as a form of compensation. Brandish reveals she knows they're Fairy Tail members and that Marakov is alive, before warning them to not continue their journey. To prove her point, she causes the island to shrink, stranding both them and the citizens in the water before vanishing, leaving Team Natsu to contemplate the strength of their enemy after seeing this display.

The fishing fleet arrives at the former location of Caracol Island and rescues the population, with Erza helping to locate everyone. Team Natsu, Wendy and Carla are then teleported by Mest to an underwater temple, directly below Caracol, revealing it as a rendezvous location with the spy. Suddenly the temple begins to move, and is revealed to be Sorano's submarine, Olympia. Everyone is shocked that Sorano, formerly known to them as Angel, is the spy, including Erza who complains about it not being Erik. Sorano reveals that she knows Makarov's location, and the submarine departs towards Alakitasia.

Rescue Operation: Landfall in Alakitasia
Meanwhile, in the capital city of Alvarez Empire, Vistarion, Makarov and Yajeel play a game of Rejenca, while discussing the rumors of Fairy Tail's revival and Emperor Spriggan's disposition towards Makarov, who is surprised that Spriggan welcomed him with open arms as a guest, as well as his openness to negotiations. Yajeel reveals that the emperor has a habit of wanderlust and rarely appears in the capital. Moments later, they hear a commotion from the street, and people announce that their beloved emperor has returned. Makarov is informed that Spriggan will listen to his concerns, but he is shocked to see that the emperor is Zeref himself.

Zeref returns to his castle and orders for the Spriggan 12 to gather, he's met by four of them, including Invel, Dimaria Yesta, Ajeel Lamur, and August, as well as Yajeel who directs him to Marakov, informing of his need to meet him. Zeref and Marakov go somewhere private and talk, with Zeref revealing that he is indeed the Emperor of Alvarez, having created the country and kingdom a long time ago so he may have the forces he needs to fight Acnologia and capture the Lumen Historie or as the two know it, the Fairy Heart. Zeref also reveals that he will start the real Dragon Festival: A war between the humans, Acnologia and himself to see who survives.

Marakov tries to attack him after hearing this, but Zeref holds him in place with his Magic, thanking him for raising Natsu. Before he can deliver the final blow, Mest suddenly warps in, grabs Marakov and teleports away back to the forest where Team Natsu awaits. As Mest recovers, he informs the group he saw Zeref, much to Natsu's anger. Marakov then laments the pointlessness of trying to negotiate with the Emperor, but Team Natsu assure him they understand his actions and inform him of Fairy Tail reforming, with Natsu telling him they've come to take him home. However, they're suddenly found by Ajeel whose power over sand allowed him to track the group. As Mest is low on magic power, he can only make one more teleport, and is saving it for reaching the shore to jump to Sorano's vehicle, Makarov orders everyone to run. They do so, with Erza driving a four wheeled magic vehicle and Gray and Lucy trying to slow Ajeel down with their new powers. It seems to work until Ajeel creates a sinkhole under the vehicle, intending to bury them in sand, all the while gloating of his superior power. However, much to Ajeel and Marakov's shock, the group manages to bust out of the sinkhole before Natsu punches Ajeel in the face.

Despite the hit, Ajeel recovers and unleashes a major sand attack on the group. Markarov manages to save Team Natsu proclaiming he won't let Ajeel hurt them. But the Spriggan Guard responds by sending a gigantic sand tidal wave at them that'll disintegrate everything. Just as it's about to hit, lighting suddenly vaporizes the wave. The group see that it's Blue Pegasus's airship with Laxus standing on it along with the rest of Gajeel's group aboard it. Seeing this, Mest teleports their group into it. When Ajeel tries to attack, Laxus sends a major lighting attack down to stop him, allowing the group to get away. Though August manages to save Ajeel thanks to a barrier he threw up at the last moment. Zeref, sensing this, states that things are just in the beginning phase.

As everyone reconciles on the ship, Marakov smiles and cries, stating Fairy Tail is the best family one could wish for.

Prelude to the Invasion: Secert of the Fairy Heart
The parties all return safely back to Magnolia and the guild hall celebrate the return of Markarov. Erza quickly gives up her position as guild master to Marakov now making him the eighth master. After a bit of partying, Makarov gets everyone's attention and apologizes to them for his actions in disbanding the guild. He also warns them that Alvarez will soon be coming for them though Natsu assures him that the guild will be willing to fight which everyone agrees with. Marakov then proceeds to tell them about the Lumen Historie but Mavis steps in and offers to do it herself, beginning to detail her past with Zeref and what lead to the current situation.