Episode 16 of "The Haunted Palace" kicks off with an intense weakening confrontation between Gangcheori and the malevolently possessed King. Gangcheori, wielding talismans, manages to the possessed monarch before darting away to safety. The group subsequently converges at a secure hideout, where the Crown Prince, overcome with anxiety, finds solace in Gangcheori's reassuring pledge to personally rescue the King. This vow, however, stirs a tumult of emotions within Yeo-ri, who realizes its implication: Gangcheori's impending self-sacrifice. She yearns for but a fleeting taste of an ordinary life, even if only for a handful of days, before their imminent confrontation with destiny. Relenting to her wishes, Gangcheori entrusts her with the task of fetching Mrs. Yoon to their refuge.
The question looms large—how will they vanquish the menacing 8-foot ghost? Alas, it transpires as a ruse devised to separate Gangcheori from the group. Upon his return, he discovers Yeo-ri missing and promptly sets off in pursuit, leaving Mrs. Yoon in a state of anxious distress, her plea for his safe return hanging in the air.
Meanwhile, within the palace walls, Head Eunuch Kim covertly sneaks Yeo-ri inside, where she joins forces with Royal Guard Kim. Together, they overpower the possessed King's loyalists, including the formidable Assassin Jung. Yeo-ri confronts the possessed King, only to reveal a starting twist: she too has fallen prey to possession, this time by the fiery grim reaper. An epic battle ensues, with the towering 8-foot ghost defiantly refusing to yield to the reaper's summons. In a climactic moment, Pung-san lends his formidable power to the ghost, empowering it to expel the reaper with a resounding kick.
Just as the ghost is about to claim Yeo-ri's life, Gangcheori bursts onto the scene, launching an assault. Their exchange is laden with vitriol, uncovering the ghost's equally profound hatred for Gangcheori. On that pivotal night, Cheon had implored the heavens for salvation, yet Gangcheori, possessing the means to aid him, was consumed solely by his own ascension aspirations. Now, the vengeful spirit inflicts grievous wounds upon Gangcheori and begins to choke the life out of Yeo-ri. Gangcheori's countenance falls, and with a heavy heart, he activates his pearl. He voices his regret for his past neglect and vows to redeem the souls of the deceased. As he unleashes the full power of his pearl, the ghost vanishes into thin air, leaving Yeo-ri and the King to awaken, though Gangcheori remains unconscious.
Later, Yeo-ri performs the solemn rites for the departed villagers of Yongdam. To her astonishment, they all materialize, led by Cheon, whose spirit has been restored. The King, bowing his head in humble acceptance, acknowledges his sin of ignorance and pledges never to forget, vowing to protect others from suffering similar exploitation. Cheon harbors a bittersweet resentment, longing merely for a heartfelt apology, which, though simple, proves sufficient to usher all the spirits into the afterlife.
As for Gangcheori, Ga-seop comes to a realization: Gangcheori's mission from the outset was to salvage the nation. However, this revelation offers little solace to Mrs. Yoon, who rails against Heaven for stealing her son twice over. The King, too, feels the void left by Gangcheori's absence, recognizing him as his sole genuine companion. Yeo-ri reprimands the imugi for breaking his solemn promise of eternal companionship.
But just as they prepare to lay Gangcheori to rest, he miraculously awakens. Overjoyed, he envelops Yeo-ri and Mrs. Yoon in warm embraces. During a leisurely stroll with the King, Gangcheori confides that he encountered the Heavenly Sovereign, who, moved by his plight, granted him a choice: to ascend to Heaven or return to Earth. Gangcheori, jesting aside, chose Earth, albeit he playfully claims it was solely for Yeo-ri's sake.
Does everyone attain closure in their lives? With the disappearance of the towering 8-foot ghost, the souls it had consumed are finally liberated. The Queen pays a visit to the King, harboring the hope that he may one day reclaim his happiness. As she crosses into the afterlife, the King senses her presence fleetingly, a gentle whisper from beyond. Neop-deok embraces Yeo-ri, imbuing her with strength and encouragement before embarking on his own journey to the other side.
Se-won and Pung-san attempt to flee their impending fate, but their escape is thwarted. Cornered and desperate, Pung-san manipulates Se-won into serving as bait for the pursuing soldiers. Se-won is apprehended, while Pung-san momentarily believes himself safe—until a bolt of lightning strikes him down. In his final moments, he comprehends that it is Gangcheori's curse claiming him.
Choi Won-u ascends to the position of Chief State Councillor, collaborating with the King and the Crown Prince on reforms aimed at abolishing slavery. The Queen Mother seeks redemption by atoning to Ok-im, yet the drowned ghost, now attached to Yeo-ri, refuses to depart.
Yeo-ri's optician business thrives, crafting glasses and sunglasses for notable figures such as Choi Won-u and the King. In-seon endeavors to mend fences with Yeo-ri but harbors a lingering twinge of jealousy upon learning of her engagement to Gangcheori. As a token of farewell, Yeo-ri bestows upon her a love talisman, a symbol of their lingering bond.
The King and Gangcheori continue their usual banter while observing the plight of the common folk and devising ways to alleviate their struggles. Years later, Yeo-ri and Gangcheori welcome a daughter, Ga-won, who inherits her father's lightning powers. Mrs. Yoon stands as the sole authority capable of restoring order when Ga-won and Gangcheori find themselves at odds.
At the conclusion of "The Haunted Palace" Episode 16, Head Eunuch Kim arrives with news of another supernatural occurrence. Gangcheori, ever the entrepreneur, demands payment for addressing the issue, prompting Kim to haggle—albeit reluctantly, for Ga-won's sake. Yeo-ri and Mrs. Yoon swiftly put an end to their squabbling, with Yeo-ri accompanying Gangcheori as they set out to confront the new supernatural threat.
