Annie and Alvy split up, and Alvy tries dating far-out, skinny rock magazine reporter Pam (Shelley Duvall), spending time with her while she covers a "transplendent" Maharishi event. Stork-like Pam refers to her 70s-ish love for Bob Dylan, Mick Jagger, the Rolling Stones, and confesses that she is a Rosicrucian. Alvy states his position about religion: "I can't get with any religion that advertises in Popular Mechanics." Although the Maharishi is God-like, Alvy notices the hypocrisy of the holy man relieving himself ("Look, there's 'God' coming out of the men's room!").

After the event, the two sleep together in his apartment. Propped up in bed, Pam - after taking a very long time to have an orgasm, compliments sore-jawed Alvy:

Pam: Sex with you is really a Kafka-esque experience.
Alvy: Oh. Thank you.
Pam: I mean that as a compliment.
Alvy: I think, I think there's too much burden placed on the orgasm, you know, to make up for empty areas in life.
Pam: Who said that?
Alvy: It may have been Leopold and Loeb.

[Note: Leopold and Loeb were a pair of college students who sublimated their homosexuality into a 'perfect crime' murder, which inspired films such as Alfred Hitchcock's Rope (1948), Richard Fleischer's Compulsion (1959) starring Orson Welles, Tom Kalin's Swoon (1992), and Barbet Schroeder's Murder by Numbers (2002).]

Alvy receives an emergency phone call - a false, manufactured crisis - to come to Annie's apartment in the middle of the night. He arrives and an hysterical Annie wants to be rescued simply because she has found a big black spider in her bathroom. He is disgusted: "Don't you have a can of Raid in the house? I told you a thousand times. You should always keep a lot of insect spray. You never know who's gonna crawl over." Alvy expresses his big game-hunt preparedness [He stands in front of the pictures she captured of him at the beach house with the lobsters, and then prominently and fondly hung in her apartment]:

You joke about me. You make fun of me, but I'm prepared for anything. An emergency, a tidal wave, an earthquake.

He notices a rock concert program on her bureau and asks: "Did you go to a rock concert?...Oh yeah really, really? How'd you like it? Was it, was it heavy? Did it achieve total heavy-o-city?" Although arachnophobic, Alvy downplays how a small spider can be the cause of such hysteria and appears jealously hostile to her, questioning why she didn't call her rock concert "date" to help kill the spider instead of him. After looking down at a National Review magazine, he sarcastically adds:

Why don't you get William F. Buckley to kill the spider?...Are you going with a right-wing rock 'n roll star?

In a memorable scene, Alvy is the voice of experience in killing spiders:

Darling, I've been killing spiders since I was thirty, OK?

Then when he has the actual showdown, he reacts to the insect bigger than he expected: "Honey, there's a spider in your bathroom the size of a Buick."

Alvy: Hey, what is this? You got black soap?
Annie (offscreen): It's for my complexion.
Alvy: What - are you joining a minstrel show? (His line reflects insecurity about changes in her life - modifications interpreted as perverse - a white person impersonating a slave!)

He thrashes around in the bathroom with her Dunlop tennis racket as a swatter to kill the spider, knocking articles from a shelf. [They met and started a relationship while playing tennis - a slightly-similar circumstance.]

After he has done the valiant deed, he approaches her on the bed where she is sobbing with lonely tears. He relentlessly rattles off a few jokes before getting serious and sitting down beside her:

Alvy: I did it. I killed 'em both. What's the matter? What are you sad about? What did you want me to do? Capture 'em and rehabilitate 'em?
Annie: Don't go, OK? Please?
Alvy: What do ya mean, 'don't'? What's the matter? What? Are you expecting termites? What's the matter?
Annie: I don't know why. I miss you.

She also questions him suspiciously, guessing: "Alvy, was there somebody in your room when I called you?" He doesn't admit that Pam was there - it was the television set she heard. They sleep together - Annie doesn't ever want to break up again and they decide to reconcile and get back together:

Annie: Alvy, let's never break up again. I don't wanna be apart.
Alvy: You know Annie, I think we're both much too mature for something like that.
Annie: Living together hasn't been so bad, has it?
Alvy: No, for me it's been terrific, you know...'cause there is just something different about you. I don't know what it is, but it's great.
Annie: You know, I think that if you let me, maybe I could help you have more fun.

For Annie's birthday weekend, Alvy joins with friend Rob to go to Brooklyn to see their old childhood neighborhood for a sentimental journey. Alvy remembers: "I was a great athlete...I was all-school yard." He shows them where he lived under the roller coaster, falsifying the reality of his past: "I had some very good memories there." Interjecting themselves into the scene, the three of them stand on the sidelines of the flashback and watch Alvy's parents fight over the "most ridiculous things" - the firing of the cleaning woman. They also view unforgettable guests that Alvy remembers from the 1945 Welcome Home party (from the war) for cousin Herbie. One of his father's friends, Joey Nichols, does an unfunny comic routine with nickels. Young Alvy concludes: "What an asshole!" They also watch his mother's aging sister, Aunt Tessie ("a great beauty," and "the sister with personality"). At the end of the day, Alvy presents Annie with birthday gifts (both reflective of different sides of his nature) - bold, sexy red lingerie (which shocks her): "This is more like a present for you!" and a practical watch: "You knew I wanted this."

As Annie's singing and talent improves, so does her confidence, personal strength, and independence. She ultimately becomes less self-conscious and less self-effacing. In a performance which contrasts sharply with her nervous singing debut, she confidently sings solo at her Manhattan club - it is a warm, bluesy, beautiful rendition of "Seems Like Old Times" that commemorates the warmth of their renewed relationship. The close-up camera views her captivating hold on her appreciative audience in the darkness in a very prolonged, flattering shot. Alvy knows how she has matured and blossomed: "You were sensational. I told you that if you stuck to it, you would be great, and you were sensational." Her song also marks a climactic turning point in her life - Annie will inevitably leave Alvy.

At the bar in the club, she is approached by smoothie, Los Angeles record producer / tycoon / musician Tony Lacey (singer Paul Simon) [a thinly-disguised satire on Warren Beatty]. Slightly jealous by all the admiring attention Annie receives, Alvy finds an excuse for not attending a party they are invited to at Tony's hotel room, where they could chat with Jack (Nicholson) and Anjelica (Huston). Alvy pleads that they have a previous "thing," and later grouchily admits to Annie that he has an inability to experience pleasure:

You know, I don't think I could take a mellow evening because I - I don't respond well to mellow. You know what I mean? I have a tendency to - if I get too mellow, I - I ripen and then rot, you know.

Anxious not to lose her, Alvy diverts her from a career opportunity and from seeing Tony Lacey again. Instead, they go and watch another showing of Ophuls' The Sorrow and the Pity. The subtitles under the picture reinforce his alienation and 'hoarding' of her time:

The Jewish warmongers and Parisian plutocrats...tried to flee with their gold and jewels.

It is the beginning of the end of their relationship. Alvy becomes too insecure and possessive of Annie's every adventurous, fun-loving move.

In another clever split-scene sequence of dueling therapies to illustrate their impending separation and differences in personalities, Alvy and Annie each confide to their own psychiatrists (a male analyst for Alvy, and a female one for Annie) about their sexual problems and the frequency of their lovemaking. In the cramped, left one-third of the screen, Annie sits up and speaks to her therapist in a modern, artistically-furnished, functionally well-lit room. On the right two-thirds of the screen, Alvy lies full-length prone in a Freudian pose in a dark, wood-paneled, traditional office. Their perspectives about the same situation are entirely different and opposite - a "Rashomon Effect":

Alvy's analyst: How often do you sleep together?
Annie's analyst: Do you have sex often?
Alvy (lamenting): Hardly ever, maybe three times a week.
Annie (complaining): Constantly, I'd say three times a week.

Alvy feels ambivalent about having encouraged Annie's progress toward being more assertive. He has paid for her psychiatrist and has encouraged her career: "The incredible thing about it is, I'm paying for her analysis and she's making progress, and I'm getting screwed...It's absurd. She's making progress and I'm not making any progress. And her progress is killing my progress." Their mis-matched relationship becomes poisoned for many reasons - misunderstandings, possessiveness and jealousy, different goals, interests, hangups, and moods, and plain irrationality.

In the memorable "cocaine scene," Alvy proves his maladroitness with drugs, as he stated earlier. He doesn't want to try snorting cocaine, but is reproached for not wanting "to try anything new":

Alvy: I don't want to put a wad of white powder in my nose. There's the nasal membrane...
Annie: You never want to try anything new, Alvy.
Alvy: How can you say that? Whose idea was it? I said that you, I and that girl from your acting class should sleep together in a threesome.
Annie: Well, that's sick!
Alvy: Yeah, I know it's sick, but it's new. You didn't say it couldn't be sick.

To meet everyone's dare, he attempts it, sneezing away about $2,000 worth of cocaine - one of the film's funniest sequences. [The scene serves as a bridge to the next California-bound scene. Before Alvy's exploding sneeze, Annie non-chalantly tells the other guests: "I didn't tell you, we're going to California next week." New Yorker Alvy quips: "I'm thrilled, as you know."]

During Christmas week, they go to Los Angeles so Alvy can present an award on a television show in Burbank. Their old friend Rob, an actor, has already moved there to star in a television series. He takes them for a driving tour of Beverly Hills, incongruously through bright sunshine at Christmas-time. [The scenes in LA appear deliberately overexposed to accentuate the garishness of people's lifestyles there.] Rob comments on all the hedonistic pleasures: his "relaxed" lifestyle, his house next to Hugh Hefner's house, and the gorgeous women: "They're like the women in Playboy Magazine only they can move their arms and legs." Alvy derides the inconsistent L. A. architecture: "French next to Spanish next to Tudor next to Japanese."

In contrast, Annie admires the spotless cleanliness: "It's so clean out here." New Yorker Alvy cynically reacts:

That's because they don't throw their garbage away. They make it into television shows.

A Santa Claus, sleigh, and reindeer sit on a perfectly-manicured, green lawn. Alvy clearly prefers New York to California: "Santa Claus will have sunstroke...There's no economic crime, but there's ritual, religious cult murders, you know there's wheat germ killers out here." In Los Angeles, the only visible theatre is showing a double-bill: House of Exorcism and Messiah of Evil - while on the soundtrack of Rob's sports car, the radio's Christmas tune sings: "To save us all from Satan's power when we were gone astray." Alvy calls it "immoral" when he sees that Rob's TV show uses fake canned laughter on the pre-taped situation comedy soundtrack - he snidely asks: "Is there booing on that?" He immediately becomes nauseated and dizzy, so a doctor is summoned to his hotel room to check out his psycho-somatic illness. He complains when Annie cancels his TV show appearance ("They're going to tape without you"), but begins eating chicken meat nonetheless - and improves dramatically.

Rob invites Alvy to a lavish Hollywood Hills mansion Christmas party, held by Tony Lacey. Dialogue in the party embodies the Southern California lifestyle of entertainment figures:

I'll take a meeting with you if you'll take a meeting with Freddie.
I took a meeting with Freddie. Freddie took a meeting with Charlie. You take a meeting with him.
All the good meetings are taken.

Right now, it's only a notion. But I think I can get money to make it into a concept. And later turn it into an idea.

Not only is he a good agent, but he really gives good meeting.

The place is so large that Rob believes, in a complimentary way, that he brought a "road map to get us to the bathroom." Coincidentally, it is being held by the record tycoon who Alvy worries "has a little thing for Annie." Rob notices that one of the guests, Tony's girlfriend - a bra-less, slender beauty (Laurie Bird) has V.P.L. (Rob translates: "Visible Panty Line" - any early use of the acronym). Alvy agrees, jokingly: "Yeah, she's a 10, Max, and that's great for you because you're - you're used to two's, aren't you?" The two of them make up further speculations (a game that Alvy would often play with Annie) about another loving couple:

Rob: Don't they look like they just came back from Masters and Johnson.
Alvy: Yeah, intensive care ward.

They nervously fear speaking to Tony's girlfriend as she approaches - Rob worries that his "brain is going to turn into guacamole," but Alvy confidently says: "I'll handle it. I'll handle it." There are various references to 70s fads in the next conversation. She wrongfully remembers him from an EST (Erhard Seminars Training) session - a 70s cultish phenomenon that was basically an intensive group therapy session for participants who would often suffer verbal abuse:

Tony's girlfriend: You're Alvy Singer, right? Didn't we meet at EST?
Alvy: EST? No, no, I was never to EST.
Tony's girlfriend: Then how can you criticize it?...
Alvy: No, no, no, I came out here to get some shock therapy, but there was an energy crisis...Hey, you guys are wearing white. It must be in the stars...Uri Geller must be on the premises someplace. [Uri Geller was a famed paranormal psychic who was skeptically viewed by some as practicing trickery and fraud.]
Rob: We're gonna operate together.

Falling under Tony's spell, Annie is invited to come for six weeks and live there with him during the cutting of her record album. Alvy spitefully defends the dirty-ness of New York to Tony: "I'm into garbage. It's my thing." They pass a guest (Jeff Goldblum) who is telephoning someone to say: "I forgot my mantra."

On the flight home to New York, Annie realizes she likes the star-studded, sunny California lifestyle and the incredible opportunities being presented to her. In a "dialogue of thoughts" voice-over as they sit side by side on the plane, they view the California visit differently, assessing their failed romance and relationship. Alvy has discovered an attractive alternative himself ("It was fun to flirt") and that the California warmth is not for him [He echoes his earlier words: "if I get too mellow, I - I ripen and then rot."]:

Annie: That was fun. I don't think California is bad at all. It's a drag coming home.
Alvy: A lot of beautiful women. It was fun to flirt.
Annie: I have to face facts. I adore Alvy, but our relationship doesn't seem to work anymore.
Alvy: I'll have the usual trouble with Annie in bed tonight. Why do I need this?
Annie: If only I had the nerve to break up but it would really hurt him.
Alvy: If only I didn't feel guilty asking Annie to move out. It would probably wreck her. But I should be honest.

They analytically present each other with an honest evaluation of the end of their relationship:

Annie: Alvy? Let's face it. You know something? I don't think our relationship is working.
Alvy: I know. A relationship, I think, is-is like a shark. You know, it has to constantly move forward or it dies, and I think what we got on our hands is a dead shark.

As they split up, including their possessions, they sort through their books, dismantle all the objects of their shared past, and objectively discuss the end of their relationship. She reminds him of his morbid taste in reading books with 'death' in the title:

Alvy: Whose Catcher in the Rye is this?
Annie: Well let's see now. If it has my name on it, then I guess it's mine.
Alvy: ...You know, you wrote your name in all my books 'cause you knew this day was gonna come.
Annie: Well, uh, Alvy, uh, you wanted to break up just as much as I do.
Alvy: No question about it. I think we're doing the mature thing, without any doubt.
Annie: Now look, all the books on death and dying are yours and all the poetry books are mine.

Alvy lingers over the copy of The Denial of Death that he generously bought for her at the start of their relationship. She wants to give it back ("it's a great weight off my back"), but he puts it back within her packed box of belongings when she turns away - to serve as a reminder of himself and his lessons and teachings about life. She sorts through his political buttons: "Impeach Eisenhower, Impeach Nixon, Impeach Lyndon Johnson, Impeach Ronald Reagan." They assure each other that nothing is permanent and that they can come back together as they have in the past.

After the break up, Alvy leaves a Third Avenue movie theatre exclaiming unhappily: "I miss Annie. I made a terrible mistake." Outside the theatre, a bystander (Sigourney Weaver is hanging on his arm, in her non-speaking debut role) adds: "She's living in Los Angeles with Tony Lacey." Another older woman on the street questions him:

Woman: Don't tell me you're jealous?
Alvy: Yeah, jealous. A little bit, like Medea. [Medea, written by Euripedes, was about horrific, murderous revenge following an abandonment.]

And then he shows the woman Annie's black soap - to prove that Annie is facing serious change issues:

Alvy: ...I found this in the apartment. Black soap. She used to wash her face eight hundred times a day with black soap. Don't ask me why.
Woman: Well, why don't you go out with other women?
Alvy: Well, I-I tried, but it's, uh, you know, it's very depressing.

Alvy tries to go out with other women, but he's the one that cannot cope. In a contrasting, re-played scene, Alvy attempts to re-create the high-spirited mood of an earlier time with Annie. He again prepares lobsters with a different date at the beach house, but regretfully, she is humorless, serious, and too young - compatibility just doesn't exist between them.

Alvy tries to get Annie back, flying to Los Angeles to retrieve her. After landing he immediately gets his "chronic Los Angeles nausea" again. After fearfully driving on L.A. freeways to a health food restaurant on Sunset Boulevard where he will meet Annie, Alvy orders "alfafa sprouts and a plate of mashed yeast." Almost his first insecure words to Annie are an unrealistic proposal of marriage: "I think that we should get married." He has more negative words about how he despises Los Angeles: "It's like living in Munchkinland." Annie admits that she enjoys meeting people more, doing things, going to parties. Annie clearly sees that Alvy has a narrowly-defined range of interests and activities, like New York City itself, and believes that her range of pursuits is much wider. She accuses him of being "incapable of enjoying life":

Alvy: (sadly) So what - you-you're not gonna come back to New York?
Annie: What's so great about New York? I mean, it's a dying city. You read Death in Venice.
Alvy: Hey, you didn't read Death in Venice till I bought it for ya.
Annie: That's right, that's right. You only gave me books with the word 'death' in the titles.
Alvy: That's right, 'cause it's an important issue.
Annie: Alvy, you're incapable of enjoying life, you know that? I mean you're like New York City. You're just this person. You're like this island unto yourself.
Alvy: I can't enjoy anything unless everybody is. If one guy is starving someplace, that puts a crimp in my evening.

Out of his element in California, Alvy wants Annie to get married to him, and to return with him to New York, but she politely refuses. Alvy interprets her independence in Los Angeles as personal rejection and disaffection. Annie wants to remain friends and has only positive things to say about his nurturing of her: "You're the reason that I got out of my room and that I was able to sing and, and, and you know get more in touch with my feelings and all that crap." As they part on sour terms and their conversation degenerates into a bitter argument, Alvy becomes even more upset when he learns that Annie's new lover Tony has been nominated for Grammy Awards. The word "Grammy" brings up earlier allusions to anti-Semitic "Grammy" Hall, and he cries out with typical Jewish paranoia:

They give awards for that kind of music? I thought just earplugs...They do nothing but give out awards. I can't believe it. Greatest Fascist Dictator - Adolf Hitler!

Frazzled and unaccustomed to driving in wide-open spaces, Alvy relives his Coney Island "bumper car" days with his rental car, damaging it and other property as he begins to drive away. He is arrested and jailed because he has "a terrific problem with authority." Later, he is bailed out by friend Rob - who seems annoyed that Alvy's phone call interrupts his sexual escapades with under-aged girls who let out high-pitched squeals: "Twins, Max! 16 years-old. Can you imagine the mathematical possibilities?" Although Alvy suggests that Rob should be doing traditional Shakespearean drama, Rob remembers his past horrible acting experience in New York: "Oh, I did Shakespeare in the Park, Max. I got mugged. I was playing 'Richard II,' and two guys with leather jackets stole my leotards." Before they drive away in the bright sunshine, Rob dons a type of radioactive-proof headgear sun visor to prevent aging:

Alvy: Max, are we driving through plutonium?
Rob: Keeps out the alpha rays, Max. You don't get old.

In the next scene, two young New York actors rehearse Alvy's first play - a play that is, in retrospect, the film Annie Hall itself. Art imitates life. It includes the scene and many of the same words of dialogue of his final breakup in Los Angeles at a Sunset Boulevard health-food restaurant with Annie - but now it is Alvy's 'ideal' version - a reconciliation. This time, Alvy is more kind and praiseworthy toward Annie, and the ending is different - the "Annie" character decides to return to New York and come back to her hero.

Actor Alvy: You're a thinking person. How can you choose this lifestyle?
Actor Annie: What is so incredibly great about New York? It's a dying city. You - you read Death in Venice.
Actor Alvy: You didn't read Death in Venice till I gave it to you.
Actor Annie: Well, you only give me books with the word 'death' in the title.
Actor Alvy: It's an important issue.
Actor Annie: Alvy, you are totally incapable of enjoying life. You're like New York. You're an island.
Actor Alvy: OK, if that's all that we've been through together means to you, I guess it's better if we just said goodbye, once and for all! You know, it's funny, after all the serious talks and passionate moments that it ends here - in a health-food restaurant on Sunset Boulevard. Goodbye, Sunny.
Actor Annie: Wait! I'm - I'm gonna go with you. I love you. (They embrace and kiss.)

Observing the rehearsal, Alvy shrugs toward the camera: "What do you want? It was my first play." He suggests one motivation of artists [his observation recalls the earlier McLuhan scene in the movie theatre lobby]:

You know how you're always trying to get things to come out perfect in art because, uh, it's real difficult in life.

Alvy does have other chances to meet Annie, to have lunch and they "just kicked around old times." She had moved back to the Upper West Side of Manhattan, and was living with another guy in SoHo. When Annie and Alvy happen to meet (seen in an extreme long shot under a theatre marquee), they both are dating other people. She was dragging her boyfriend into the Thalia Theatre to again see Ophuls' film, The Sorrow and the Pity, and Alvy is with a tall date (Sigourney Weaver in her second appearance in the film). Alvy feels vindicated about his lasting influence on Annie: "...she was, of all things, dragging him in to see The Sorrow and the Pity - which I counted as a personal triumph." [The film title prominently displayed on the marquee above them poignantly underlines their failed romance.]

In the thought-provoking, bittersweet ending, a tribute to Annie, the screen flashes back brief snapshots of warm, happy highlights of their entire love affair (at the Hamptons, in Brooklyn, etc.) to perceptively sum up the nature of his memories and emotions for her, making it clear that their relationship was well worth it. Annie's song "Seems Like Old Times" is faintly heard on the soundtrack as he memorializes their relationship in the art-form of film. They are seen standing together on a street corner in New York at West 63rd St. (across the street from Lincoln Center) (filmed with a stationary camera), shaking hands and parting in different directions. Alvy, after a very long glance after her departing figure, turns away toward solitude, his head bent down toward a lost future, as he delivers a voice-over:

After that, it got pretty late and we both had to go. But it was great seeing Annie again. And I realize what a terrific person she was and how much fun it was just knowing her...

He has lost her as a lover, yet can accept and transcend the experience of lost love through an affirmation of her character in another dimension. Having becoming fully individualized and distinguishable from the Woody Allen character at the start of the film, fictional character Alvy narrates the final words of the film in voice-over. He reacts philosophically to another food joke with greater insight into life. He sums up an understanding of how relationships are utterly absurd and that love inevitably fades, although people still crave relationships:

...And I thought of that old joke. You know, the, this, this guy goes to a psychiatrist and says, 'Doc, uh, my brother's crazy, he thinks he's a chicken,' and uh, the doctor says, 'Well why don't you turn him in?' And the guy says, 'I would, but I need the eggs.' Well, I guess that's pretty much now how I feel about relationships. You know, they're totally irrational and crazy and absurd and - but uh, I guess we keep going through it because most of us need the eggs

The very last word in the film is from the final line of the song "Seems Like Old Times." The song swells up after the joke, ending on Annie's emphasis on the word "you":

Seems like old times
Having you to walk with
Seems like old times
Having you to walk with
And it's still a thrill
Just to have my arms around you
Still the thrill that it was the day I found you
Seems like old times
Dinner dates and flowers
Old times, staying up all hours
Making dreams come true
Doing things we used to do
Seems like old times
Here with You.