As he waits and thinks about the state of affairs, Anakin replays Palpatine's voice and promises in his mind - if the Jedi destroy the Chancellor, any chance of saving his beloved Padmé during childbirth would be lost. Disobeying orders, he rushes to a starship to join the Jedi Masters as they confront Chancellor Palpatine in his office and arrest him in the name of the Senate ("The Senate will decide your fate").
The Dark Lord Sidious questions the treasonous arrest, claiming: "I am the Senate," defensively draws his lightsaber, and quickly kills three of the Jedi, leaving only Mace Windu alive. As the duel continues (and Anakin arrives), Mace Windu disarms Palpatine and threatens him. Seeming to be oppressed, Palpatine claims to Anakin that the Jedi are unlawfully and traitorously taking over.
Sidious then fires a flurry of Force lightning at Mace, who deflects it with the blade of his lightsaber. The streaks backfire into Sidious' body and causes his face to become distorted, deformed and disfigured. Seeing the weakened Sith, Anakin argues that he must stand trial rather than die, but Mace disagrees and is about to strike a fatal executionary blow for the Jedi Order ("He's too dangerous to be left alive").
Anakin intervenes and chooses to save Palpatine ("It's not the Jedi way. He must live. I need him") - he severs Mace's raised right hand. Now lacking support, shocked, and injured, Mace is blasted out of the window to his death by cackling Sidious' Force lightning, as he screams: "Unlimited power!" Dark Lord Darth Sidious then appoints the horrified Anakin as his new apprentice ("Learn to use the dark side of the Force"), and re-names him Darth Vader.
Anakin promises he will pledge his allegiance to the Chancellor and the Republic (and not to the Jedi), in return for saving his wife from death: "I will do whatever you ask. Just help me save Padmé's life. I can't live without her." Vader's first assignment is to launch a Clone trooper assault against the Republic's enemies - now the Jedi, by invading the Jedi Temple to crush the rebellion, and to mercilessly and brutally slaughter all of the Jedi found there (including swordsmasters and Younglings).
Vader is then to travel to Mustafar to kill all of the remaining Separatist leaders including Viceroy Gunray (Silas Carson). Once the Sith rule the galaxy, Sidious promises there would be peace and an end to war, although he is fomenting a major Galactic Civil War within the Empire.
Later, from his office, Sidious (via hologram) also broadcasts an order to Commander Cody of the Republic's Clone Troopers and to other commanders: "Execute order 66" - the action meant that Clone Troopers everywhere in the galaxy are to kill their Jedi Masters and Generals - the start of a Great Jedi Purge. On Kashyyyk, Yoda senses widespread death, knowing that there is an unexpected ambush happening, and beheads two Clone commanders about to kill him.
The only surviving Jedi to evade extermination are Obi-Wan, Senator Bail Organa (Jimmy Smits), and Yoda. When they reassemble, they fear that returning to Coruscant's Jedi Temple might be a trap, but when they arrive they are quickly able to subdue the Clone troopers holding it. They are overwhelmed, however, with the evidence of the carnage and brutal murder of Younglings by lightsaber blows.
To keep other surviving Jedi away, they readjust the Temple's signal. On the volcanic planet of Mustafar, Darth Vader fulfills his mission to slaughter members of the Separatist Council and their Battle droids. Viceroy Gunray is the last to be executed by Vader himself - who begins to physically manifest the Dark Side in his body - his eyes turned yellowish and red. After reporting his success, Vader receives more instructions from Sidious - a message to all of the ships of the Trade Federation to shut down their droid units.
Meanwhile, the scarred and deformed Palpatine (wearing a hood) convenes a special session of the Senate, held in the Grand Convocation Chamber, where he announces that the rebellious plot of the Jedi to overthrow the Senate has been foiled. He tells the assembled Senators that the remaining Jedi would be hunted down and defeated - followed by approving applause.
In addition, to insure the security and stability of the Republic, he calls for reorganizing it into the first Galactic Empire "for a safe and secure society" - thus making himself Emperor. In the audience, Senator Padmé remarks to Senator Bail Organa: "So this is how liberty dies. With thunderous applause."