The Battle of the Labyrinth is the fourth installment in the series. It was released on May 6, 2008.

After being attacked by monsters, Percy returns to Camp Half-Blood and learns about the Labyrinth. Annabeth and Percy find an entrance into the Labyrinth in camp. Percy soon learns that Luke will use the entrance to lead his army through the Labyrinth straight into the heart of camp. Annabeth is chosen to lead a quest to prevent it, and chooses to bring Tyson, Percy,and Grover, even though it was traditional to bring only two companions on a quest, as explained by Chiron. While in the Labyrinth, Percy and Annabeth become separated from Grover and Tyson. They encounter Nico, who begins to forgive Percy. Percy and Annabeth arrive under Mount St. Helens. Percy accidentally causes St. Helens to erupt and washes ashore on Calypso's Island. He returns to Camp Half-Blood, rather than staying with her, stating that "she would always be his biggest 'what-if'". Then he and Annabeth recruit a mortal girl, Rachel Dare to be a guide in the Labyrinth, using her sight through the Mist, the magical veil that separates the mythological world from the mortal world, and her knowledge for the quest. Daedalus is shown to be alive and to have given Ariadne's string to Luke. They find Grover and Tyson and discover Pan, and Grover tells him that he must return to the world. But Pan says that he cannot come and before dying tells Grover to tell those who will listen that he has died. Grover does what he is told. Percy also finds Luke's body in Kronos' coffin. A final demigod joins the Titans' cause, and Kronos fully rises, using Luke's body. They flee to camp, trying to stop the invasion. Kronos' forces attack the camp, but they are defeated. The book ends with Daedalus sacrificing himself after the battle to destroy the Labyrinth, as it is tied to his life force, and Nico Di Angelo fully forgiving Percy and proposing a dangerous plan for defeating the Titans.