After the conflict with Chen, Wu retired from being a master and went onto a tea shop where he thought he would be able to enjoy his retirement. However, a ghost from Wu's past comes back to haunt him and he is forced to reveal to his pupils about things they didn't know about him. During the conflict with the ghosts, Wu informs Nya of that her mother was the previous master of water and Nya has inherited her abilities and goes onto help Nya in mastering her element in order for her to be the new ninja of water.
Wu decided to retire from being a Master and opened a tea shop—Steep Wisdom—with the help of the Ninja, Nya, and Misako. On the first day of business, Wu sent the Ninja to advertise in New Ninjago City. However, while they were serving their first customer, the Ninja returned and informed him that their elemental powers were gone. At that moment, Lloyd returned from the museum, only possessed by Morro. Wu instantly recognized his former pupil and ordered the Ninja to flee in the Destiny's Bounty.
Morro soon caught up to them using his Elemental Dragon and knowing that Morro would be relentless until he obtained the staff, Wu made an imprint of the staff's secret message, then threw it off the Bounty to distract his former pupil. Morro however had disabled the ship and it crashed in the Forest of Tranquility.
The Ninja made camp and Wu told them of his past with Morro. The next morning Misako arrived and discovered that the first symbol means Airjitzu, a martial art created by Master Yang. Wu ordered the Ninja to head to Stiix while he, Misako, and Nya returned to Steep Wisdom. Once there, he revealed to Nya that she was the Master of Water.
Wu soon began Nya's training to become the Water Ninja, though she insisted she could aid the Ninja just as well being a samurai. Wu pointed out that a samurai was unable to perform Spinjitzu or summon an Elemental Dragon, and he summoned his own as an example. The Master then presented her with the bucket challenge, wherein she had to fill a bottomless bucket completely full of water. This proved difficult for Nya and after trying all day, she gave up. Misako inquired if the day's training was a waste, but Wu noted that she had tossed the bucket into the pond, thus fulfilling her task by doing so.
Ghoultar was brought aboard the Bounty and Wu questioned the ghost along with Nya and Ronin. However, when the ghost refused to answer, Wu decided that the time would be better spent training Nya and the two left, leaving Ronin in charge of the prisoner.
Realizing they needed weapons to defeat the ghosts more than he needed his business, Wu sold Steep Wisdom and used the money to finance new vehicles from Cyrus Borg.
As part of their plan to infiltrate Stiix and destroy the Realm Crystal before the Preeminent arrived, Wu and Misako drove a noodle truck up to the city gate where they were stopped by Bansha. Wu offered Morro one last chance to give up, but he was only met by laughter and thrown into a prison with several of the town's inhabitants.
When the Ninja began their attack, Wu summoned his Elemental Dragon to destroy the prison. He lead the citizens to a waiting ferry where Wu watched to his horror as the Preeminent emerged, Lloyd apparently having failed his task.
As the ghosts of the Cursed Realm went on a rampage, Wu had the people of Stiix evacuate on a ferry but it was for naught as the cursed ghost's leader The Preeminent attacked. Aided by its followers, the monster was given the wood of multiple buildings allowing to be able to walk on the sea and pursue the ferry. Once the preeminent caught up with the ferry. actions caused those unfortunate to be grabbed by it to be absorbed making it stronger. As all seemed lost, Nya awoke her True Potential creating a giant wave that drowned the beast.
As the preeminent sunk, Morro was grabbed by its tentacles and was being dragged down and struggled to stay away from the water. However, Wu arrived on his Elemental Dragon to help him grabbing his hand and telling him to hold on but Morro realized that his fate had been sealed, and handed his old master the Realm Crystal before sinking into the ocean and dissolving to Wu's dismay. Wu then used the Realm Crystal to bring Lloyd back, Lloyd returned stating he saw the outcome of the battle on the Sword of Sanctuary. Wu and the ninja celebrate their victory declaring the future seemed alright for them and Ninjago.