Lawrence daringly flaunts his presence, jeopardizing his life and inviting pain in the Turkish stronghold of Deraa during a reconnaissance mission. Dressed as a poor Arab, he tries to find "some way to announce" himself on the street of the Turkish-held town, as Ali looks anxiously heavenward: "Be patient with him, God." With his arms outstretched and acting conspicuously, Lawrence walks through a large mud puddle (his "walk on water"), and then openly strides by a Turkish patrol, smiling calmly at Ali: "Please Ali, I am invisible." But Lawrence is seized by the patrol and brought before the Turkish Commander (Jose Ferrer), governor of Deraa. Placed in a lineup of four men, he is picked to remain behind for his fair skin and blue-eyes.

"Isolated" for three and a half years at Deraa, the Turkish Bey only hints at Lawrence's fate. Lawrence's clothes are stripped from his back, and the Turk notices the gunshot wound, asking: "Yes, you are a deserter, but from which army?" As the Turk makes sexual advances - admiring Lawrence's white, fair skin while pinching his chest, Lawrence strikes him sharply in the groin. Lawrence is ordered to be flogged - he is laid bare-backed and spread-eagled on a long, narrow bench by the Bey's degenerate-looking guards. As a grinning, sadistic private stretches and pulls on him, Lawrence is savagely beaten (and raped/sodomized? off-camera), and then is thrown out that night into a muddy street.

Ali rescues him, and as he recuperates, tells him: "Sleep, sleep, eat, eat. You have a body, like other men." After his experience and realizing that he is only a frail, flesh-bound human and not invisible or invulnerable, Lawrence reveals: "Oh I've learned all right." Having lost heart, Lawrence wishes to retreat back to his own people and give up his command to Ali:

Lawrence: I'm going, Ali.
Ali: Why?
Lawrence: Why? Heavens.
Ali: Why?
Lawrence: I've come to the end of myself, I suppose.
Ali: And the end of the Arab Revolt?
Lawrence: I'm not the Arab Revolt, Ali. I'm not even Arab.
Ali: A man can be whatever he wants, you said.
Lawrence: I'm sorry. I thought it was true.
Ali: You proved it.
Lawrence: Look, Ali, look. (He pinches the white, fair skin of his chest.) That's me. What color is it? That's me, and there's nothing I can do about it.
Ali: A man can do whatever he wants, you said.
Lawrence: He can, but he can't want what he wants. This is the stuff that decides what he wants. You may as well know. I would have told them anything. I would have told them who I am, I would have told them where you were. I tried to.
Ali: So would any man.
Lawrence: Well, 'any man' is what I am. I'm going back to Allenby to ask him for a job that 'any man' can do.
Ali: Allenby's in Jerusalem.
Lawrence: I'll make easy stages.
Ali: You?
Lawrence: Oh yes. Easy stages. Look Ali, I think I see a way of being just ordinarily happy...
Ali: And these? (gesturing to the men) Having led them here, have you no care for them?
Lawrence: You lead them. They're yours. Trust your own people, and let me go back to mine.

Back in Cairo, Lawrence wears an ill-fitting, light tan uniform when visiting with General Allenby. He requests a "release from Arabia" for personal reasons - on the brink of madness, he wishes to resign and take "an ordinary job." To Lawrence's slight surprise, he learns he has been the unwitting pawn of an imperialist power struggle for control of the Middle East. He has himself become an unwilling victim of imperialism. The suave Dryden describes the timely, recent Sykes-Picot Treaty or "agreement" between England and France - an infamous plan between two European nations to divide Arabia. The treaty betrays the cause of Arab nationalism and unity. Lawrence pleads for "my ration of common humanity":

Dryden: ...Mr. Sykes and Mr. Picot met, and they agreed that after the war, France and England would share the Turkish Empire, including Arabia. They signed an agreement, not a treaty sir. An agreement to that effect.
Lawrence (chiding): There may be honor among thieves, but there's none in politicians.
Dryden: Let's have no displays of indignation. You may not have known, but you certainly had suspicions. If we've told lies, you've told half-lies, and a man who tells lies, like me, merely hides the truth, but a man who tells half-lies has forgotten where he put it.
Lawrence: The truth is, I'm an ordinary man. You might have told me that, Dryden. (To General Allenby) And I want an ordinary job, sir. That's my reason for resigning. It's personal.
Allenby: Personal?
Lawrence: Yes sir.
Allenby: Personal? You're a serving officer in the field. And as it happens, a damned important one. Personal? Are you mad?
Lawrence: No. And if you don't mind, I'd rather not go mad. That's my reason too.
Allenby: Look, Lawrence, I'm making my big push on Damascus the 16th of next month and you are part of it. Can you understand that? You're an important part of the big push!
Lawrence (pounding on the table): I don't want to be part of your big push!
Allenby: What about your Arab friends? What about them?
Lawrence (the wounds on his back from his whipping bleed through his uniform as he speaks): I have no Arab friends. I don't want Arab friends.
Allenby: What in hell do you want Lawrence?
Lawrence: I told you. I just want my ration of common humanity.

Bentley, the opportunistic reporter, is in the outer offices and is not allowed to know what is happening to Lawrence, his "hero": "Just let me know if the man's in trouble. I've got an interest in that man. I've got a claim...You've read my stuff. I've made that boy a hero. When the war's over, that boy can be anything he wants."

General Allenby unscrupulously plays upon Lawrence's sense of destiny to convince him to stay on and return to the desert for one "big push" to take Damascus (for the Arabs). Once again, Lawrence is led to believe in his own power over others, and to see himself as the savior (or demi-god) of a race of disunited people:

Allenby: I believe your name will be a household word when you have to go to the War Museum to find who Allenby was. You're the most extraordinary man I ever met.
Lawrence: Leave me alone...Leave me alone.
Allenby: Well, that's a feeble thing to say.
Lawrence: I know. I'm not ordinary.
Allenby: That's not what I'm saying.
Lawrence: All right. I'm extraordinary. What of it?
Allenby: Not many people have a destiny, Lawrence. It's a terrible thing for a man to flunk it if he has.
Lawrence: Are you speaking from experience?
Allenby: No.
Lawrence: You're guessing then. Suppose you're wrong.
Allenby: Why suppose that? We both know I'm right.
Lawrence: Yes...
Allenby: After all...
Lawrence: I said 'Yes.' The 16th?
Allenby: Can you do it? I'll give you a lot of money.
Lawrence: Artillery?
Allenby: I can't.
Lawrence: They won't be coming for money. Not the best of them. They'll be coming for Damascus, which I'm going to give them.
Allenby: That's all I want.
Lawrence: All you want is someone holding down the Turkish right. But I'm going to give them Damascus. We'll get there before you do. And when we've got it, we'll keep it. You can tell the politicians to burn their bit of paper now.
Allenby: Fair enough.
Lawrence: Fair? What's fair got to do with it? It's going to happen. I shall want quite a lot of money.
Allenby: All there is.
Lawrence: Not that much. The best of them won't come for money. They'll come for me!

By camelback, Arabian-clothed Lawrence is led to the assembled Arab tribes who have been handsomely paid off to join the assault on Damascus. Dismayed by the appearance of Lawrence's body guards, Ali calls them "murderers" who "know nothing of the Arab Revolt." The British Generals call the Arab force approaching Damascus an "irregular cavalry...about two thousand." Brighton believes that the "cocky" Lawrence has "the bit between his teeth" and may reach Damascus before the English, unless held up by a Turkish column in front of him.

On their way to Damascus, Lawrence and his cavalry force come upon the Turkish column that has just massacred an Arab village in its path. Lawrence must decide whether to lead a charge on the Turkish column, or to go around them and head instead for Damascus. Incensed by the massacre, one of the Arabs (who grew up in the village) charges from the ranks and is shot down by the Turks in front of everyone. Revealing his satanic, repressed bloodthirsty and maddened state in a memorable sequence, Lawrence leads the Arab charge against the retreating Turkish column, shouting with wild-eyed vengeance and battlefield-intoxication:

No prisoners! No prisoners!

After the massacre at Tafas, Lawrence rushes through the dusty scene of the blood-bath assault. He ruthlessly joins in the violent mayhem, firing his pistol until it empties. His white robes are first only speckled with the blood of his victims; then, his curved dagger and right arm are pictured dripping and caked in blood. Lawrence's face, revealed in his dagger blade, reflects barbarism and madness lurking beneath his civilized veneer. Bentley arrives at the scene of the massacre, exclaiming: "Jesus wept." Ali confirms what has occurred to the dismayed, disillusioned reporter - that Lawrence's former heroism cannot be recognized. In his journey from Oxford to Damascus, a journey eclipsing both genius and madness, Lawrence has become corrupted and bloodied:

Ali: Does it surprise you, Mr. Bentley? Surely, you know the Arabs are a barbarous people. Barbarous and cruel. Who but they? Who but they?
Bentley (to Lawrence): Oh, you rotten man. Here, let me take your rotten, bloody picture, for the rotten bloody newspapers.

A clump of unripe grapes cut the previous night in Damascus are brought to Lawrence. Not even sidetracked or delayed by the attack on the Turkish column, the Arabs reach Damascus a day and a night before General Allenby and the British. Brighton informs Allenby about Lawrence's take-over of Damascus: "the whole town is plastered with the Arab flag" and "they've occupied the town...(and) set up his own headquarters in the Town Hall." The Arabs also control: "the telephone exchange, post office, power house, hospitals, fire station, everything." They call themselves "the Arab National Council," and run the city from the Town Hall.

However, the Arabs are as divided as ever - there is disarray and chaos in the Arabs' attempt at unification and government in the Town Hall in Damascus. Loud shouting erupts from one faction to another, ancient animosities flare up, and dissension arises between tribal leaders over the division of powers and responsibilities. Lawrence quiets the bickering by pounding his gun butt on the round table:

We here are neither Harith nor Howeitat nor any other tribe but Arabs at the Arab Council acting for Prince Feisal.

Lawrence argues that if they rely on English engineering to fix their technical problems (telephone, electricity, water, etc.), they will sacrifice themselves to the British government. British masters would be substituted for Turkish rulers:

Take English engineers and you take English government.

Under the strain of arguments between different tribal sovereignties, the council and Lawrence's dream of a democratic Arab state quickly dissolves into chaos and collapses, and the Arabs leave the city. General Allenby calmly waits for the disintegration of the United Arab Council. Auda begs Lawrence to leave the civilized world and return to the desert, and then walks off:

Auda: What is it? Is it this? I tell you, this is nothing. Is it the blood? The desert has dried up more blood than you could think of.
Lawrence: I pray that I may never see the desert again. Hear me God.
Auda: You will come. There is only the desert for you.

After the anti-climactic capture of Damascus, Ali decides to remain and "learn politics" - an occupation that is characterized as "very low" by Lawrence. According to Auda, being a "politician" is foreign to the Harith's cultural upbringing:

Ali: I had no thought of it when I met you. You tried very hard to give us Damascus.
Lawrence: It's what I came for. And then - it would be something.
Ali: Yes. Much. (Ali leaves the room and enters into the shadows, where he is confronted by Auda)
Auda: He is your friend.
Ali: Get your hand away from me.
Auda: You love him.
Ali: No, I fear him.
Auda: Why do you weep?
Ali: If I fear him and love him, how must he fear himself who hates himself? (Ali draws his dagger.) Take your hand away, Howeitat!
Auda: Oh, so you are not yet entirely politician.
Ali: Not yet.
Auda: Well, these are new tricks and I am an old dog. An Arab, be thanked. I'll tell thee what though. Being an Arab will be thornier than you suppose, Harith!

Problems for the Arab Council, now decimated, are insurmountable. The Turkish hospital is overflowing with wounded, and there is no water. A British medical officer (Howard Marion Crawford) finds the situation "outrageous," calls Arab-garbed Lawrence a "filthy little wog" and slaps him in the face, and then takes over the medical care of the Turks.

Realizing his actions to unite the Arabs have failed, Lawrence accepts the rank of Colonel as a final mark of privilege, and acknowledges that he has outlived his usefulness. He must lay aside his Arab costume and return to England. The intelligent Prince Feisal craftily negotiates a peaceful compromise/accord settlement with the British:

Feisal (speaking about Lawrence): He longs for the greenness of his native land. He pines for the Gothic cottages of the Surrey, is it not? Already, in his imagination, he catches trouts and all the activities of the English gentleman.
Allenby: That's me you're describing sir, not Colonel Lawrence. (To Lawrence) You're promoted, Colonel.
Lawrence: Yes. What for?
Feisal: Take the honor, Colonel. Be a little kind.
Allenby: As a Colonel, you'll have a cabin to yourself on the boat home.
Lawrence: Then, thank you.
Allenby: Well then, Godspeed.
Feisal: There's nothing further here, for a warrior. We drive bargains, old men's work. Young men make wars, and the virtues of war are the virtues of young men - courage and hope for the future. Then old men make the peace, and the vices of peace are the vices of old men - mistrust and caution. It must be so. (Lawrence leaves the room.) What I owe you is beyond evaluation.

As Lawrence leaves the conference and moves out to the lobby and a waiting car, the British medical officer (who slapped him in the face in the hospital and called him a "filthy little wog") asks for a favor:

Medical Officer: I say, it's Lawrence, isn't it? (Lawrence nods) Well, may I shake your hand, sir? (He takes Lawrence's hand) Just want to be able to say I'd done it, sir.
Lawrence: Haven't we met before?
Medical Officer: Don't think so, sir. Oh no, sir, I should remember that.

As the wily old politicians hammer out an expedient (doomed-to-fail) compromise, Feisal claims the Arab Council took power in his name - an illusory but powerful connection. Feisal presents the falsely apolitical Allenby with a copy of the Chicago Daily Courier that prominently displays a picture of Lawrence of Arabia - the liberator of Damascus:

Feisal: The world is delighted at the picture of Damascus liberated by the Arab army.
Allenby: Led, may I remind you, sir, by a British-serving officer.
Feisal: Ah yes. But then Aurens is a sword with two edges. We are equally glad to be rid of him, are we not?
Allenby: I thought I was a hard man, sir.
Feisal: You are merely a general. I must be a king...
Allenby: Well?
Dryden: Well, it seems we're to have a British Water Works with an Arab flag on it. Do you think it was worth it?
Allenby: Not my business. Thank god I'm a soldier.
Dryden: Yes, sir. So you keep saying.
Feisal (to Dryden): You, I suspect, are chief architect of this compromise...

On the first leg of his journey home to England, Lawrence is driven out of Damascus on a desert road in an open car, passing a group of Arabs riding on camels. He rises out of his seat as the Arabs partially move off the road to let them go by. The driver offers the final spoken lines of the film:

Well, sir. Goin' 'ome...'Ome, sir.

A motorcyclist speeds past them on the right, kicking up a small cloud of dust - an omen of Lawrence's own tragic demise while riding his motorcycle (in the prologue). Words from a song are heard by soldiers driving past in a truck, singing: "Goodbye, Dolly. I must leave you, Though it breaks my heart to go."

The film's finale image: Lawrence peers through the dirty, dust-covered windshield, almost invisible.