"As I said before, I've allowed you to keep your wicked life for two reasons. And the second reason is so you can tell him, in person, everything that happened here tonight. I want him to witness the extent of my mercy by witnessing your deformed body. I want you to tell him all the information you just told me. I want him to know what I know. I want him to know I want him to know. And I want them all to know they'll all soon be as dead as O-Ren." -Beatrix to Sofie Fatale
Chapter 5: Showdown at House of Blue Leaves is the fifth chapter in Vol. 1.
It starts three years ago at a council meeting the night O-Ren Ishii assumed power over the rest of the Yakuza gangs, while Beatrix narrates. O-Ren is sitting with several other Yakuza bosses, along with her entourage, including Sofie Fatale, a former protegee of Bill's and O-Ren's half-French half-Japanese lawyer, best friend, and first lieutenant, Gogo Yubari, O-Ren's sadistic 17-year-old personal bodyguard, and Johnny Mo, head general of O-Ren's gang, the Crazy 88.
It's revealed that the subject of O-Ren's Chinese and American heritage came up before the crime council one time only, the night she took control. While all the other Yakuza bosses are laughing "like stupid donkeys," one of the bosses, Boss Tanaka, becomes enraged that everyone is celebrating the perversion of the council, which he loves more than his children. O-Ren calmly asks what perversion he speaks of, which Tanaka responds that he means the perversion done by making a "Chinese Jap-American half-breed bitch" its leader.
O-Ren quickly responds by running onto the table, grabbing her Hanzo sword, and decapitating Tanaka, much to the horror of all the other bosses. She then says something to the other bosses in English, so they understand how serious she is, while Sofie translates. She tells them that she encourages them to question her logic and tell her if they're unconvinced that something she's decided is the wisest choice, but also warns them that if anybody ever brings up her Chinese or American heritage as a negative again, she will "collect your fucking head." She then calmly tells the other bosses that the meeting is adjourned.
Meanwhile, Beatrix takes a plane to Tokyo, and proceeds to O-Ren's club, the House of Blue Leaves, on a motorcycle. On the way there, she sees Sofie and has a flashback of her at the massacre. Upon arriving at the club, Beatrix waits at the bar as O-Ren and her posse also arrive. She tries to sneak into O-Ren's private room, but O-Ren's sensed danger and threw a knife out the paper wall which landed on the wall mere inches from Beatrix. She sent Gogo to check on everything, but couldn't find anybody as Beatrix was hiding on the ceiling right above her.
Beatrix then hides in the bathroom and meets Sofie, who answers her phone. Recognizing Sofie from being present at the Wedding Chapel Massacre, Beatrix uses Sofie as a hostage. Beatrix announces to O-Ren that they have unfinished business and chops off Sofie's left arm. O-Ren orders her bodyguards to kill Beatrix, but Beatrix defeats them. Gogo then confronts Beatrix. Despite Beatrix pleading to Gogo to walk away, Gogo refuses and engages Beatrix in a deadly duel. It ends when Beatrix throws a broken chair leg at Gogo's head, and the nails impale Gogo, killing her. Just then, Johnny Mo and the rest of the Crazy 88s show up and fight Beatrix. During the massive fight between Beatrix and the Crazy 88s, O-Ren disappears through the back of the building. Beatrix either kills or maims the Crazy 88s. The only survivor was a frightened young boy, who Beatrix easily defeats by cutting his crudely made sword into bits and then spanks him with the flat end of her sword. Beatrix finally defeats the Crazy 88s when she slices Johnny Mo in half. She then tells the ones who are still alive to flee, but leave their dismembered limbs behind. However, Beatrix orders Sofie to stay right where she is.
Outside, snow has fallen on the ground. O-Ren comments that Beatrix's sword is impressive, but refuses to believe it is a Hattori Hanzo sword. The two engage in a duel, during which O-Ren slashes Beatrix's back. O-Ren mocks Beatrix calling her a "silly Caucasian girl who likes to play with Samurai Swords." The fight resumes and Beatrix wounds O-Ren, who apologizes for her earlier insult. Beatrix is on the verge of tears, but knows she must finish what she started. The fight ends when Beatrix scalps O-Ren. The dying O-Ren acknowledges that it truly was a Hanzo sword, and falls to the ground dead. Afterwards, Beatrix crosses O-Ren's name off her death list.
Beatrix drives the maimed Sofie to a hillside. At first, Sofie refuses to talk, but Beatrix threatens to further mutilate her. Beatrix tells Sofie she can keep her wicked life for two reasons. Firstly, so she can tell Beatrix the information on the surviving members of the DIVAS. Secondly, so Sofie can tell Bill everything she told Beatrix. After the interrogation, Beatrix rolls Sofie's deformed body down the hill outside Tokyo General Hospital, where she is taken in and patched up. Bill is not angry at Sofie's betrayal and instead comforts her. The chapter and film ends with Bill asking Sofie if Beatrix is aware that her daughter is still alive.