This labyrinth is the true form of the world where the Persona users and Hikari were trapped in. Unlike the other labyrinths, it is not a movie, but a part of the collective unconsciousness governed by Enlil, and it resembles a massive, twisted street filled with cinemas, in which Hikari's Cinema acts as its starting point. The floor is actually a long negative film, which is the source of all of the movies broadcast in the Cinemas. The negative film is actually those of a long movie that fuels negative thoughts, implied to be documentaries of people suffering from the pain of living. Enlil's clients would only watch these movies when being trapped, further encouraging them to give up living and sink deeper into their depression. This changed for Hikari, however when Doe overwrites the negative film in her Cinema with movies based on her memories and Persona's tropes.
When the united Persona users and Hikari successfully removed all of the locks on the Cinema gates, they discuss about leaving the Cinema and regaining freedom. Nagi, despite upset that Hikari might face the same pain as before and returning, lets them open the gates. However, as they open them, it reveals a twisted landscape and Nagi drops off her guise, revealing herself as Enlil and explaining the truth of the Cinema. She reveals that the Cinema that acts as the player's hub is merely the Cinema housing Hikari and multiple other Cinemas appear in her domain, each with a person with a nearly identical mindset as Hikari before; exhibiting a lack of enthusiasm to live, submerging in apathy and refusing to leave their confines, even if she didn't trap them in the first place.
The people end up in the Cinemas because of Enlil's salvation plan and their toxic avoidance from the pain of life, where she believes that having them watch distorted movies will neuter their thoughts and allow them to escape their pain of living. In reality, this does not relieve their pain at all, but instead sinks them deeper into their negative thoughts. Despite appearing as arrogant and condescending, Enlil still lets the party leave anyway, although Hikari insists that the Persona users should remain and confront her, turning the Phantom Thieves of Hearts' clothing into their Metaverse clothing. Elizabeth also says that the street is corroding the real world, allowing people to go in and receive their "salvation." All of the people who willingly trapped themselves in the Cinema are also not of their real person, but instead disembodied wills to live. Therefore, their real person still exists in the real world without any desire to go on in their lifes. It is possible for a person to be stuck inside the domain and return back to the real world, as all of the Cinemas save for Hikari's one do not have locks and they are free to leave at any time, as the locks on Hikari's Cinema were implied to be set up by her cognition, or more accurately, Doe. However, more people will take their place due to the pressurizing conditions of society.
In order to stop the endless cycle, the party and Hikari ventures the depths of this Labyrinth. Debris block the way to vital parts of the Labyrinth and can only be destroyed by baiting a Humbaba, and true to its owner being the Mesopotamian god of wind, wind valves appear and force the player into various directions, impeding their progress. The switches have to be turned in order to allow progress throughout the Labyrinth, and one is even out of the player's reach, requiring them to bait a Namtaru to trigger it.
The depths resembles a massive backdrop housing four projectors, with the background being the Sea of Souls. When the party goes inside to confront Enlil, she summons a duo of Shadows to attack them, then kicks them out to Hikari's Cinema as a last warning. It was revealed that the movies are not simply negative films, they are actually an Akashic Record that is merely consisted of negative thoughts, cutting off all positive thoughts such as joy and happiness from it, which transform into one long movie that flows into the theaters, turning them into the movies that were broadcast in them. The wards watching movies were symbolic of the Theater District keeping their real person in a catatonically depressed state before they emerge from their theaters. The party devises a plan to replace the film with the purified movies in Hikari's Cinema by imitating Doe's method on a larger scale and recognize themselves as the Phantom Thieves of Hearts.
They execute the plan and fights the projections of Kamoshidaman, Yosukesaurus, Mother Computer and Doe in the process and replace all of the projectors with the purified films, then go into the center to confront Enlil. Enlil receives a calling card from the party and the movie world was purified, with the negative documentary replaced by the purified films in Hikari's Cinema, where Kamoshidaman vows to fight for true justice, Yosukesaurus forming a true friendship with the Herbivore Dinosaurs, Ribbon teaching a group of colored robots about flowers and personality, and the high school copy of Hikari confessing to Doe and making him vanish, then asking her father to watch the movie she created.
As Enlil's salvation plan crumbles, she gets enraged and drops down into the ground to confront the party in human form. In the middle of the battle, she exerts a terrifying power and severely damages the party, but Hikari began her attempt to persuade Enlil to give the salvation plan up and rally everyone to escape the Cinema, while the purfified films began to take effect. While at first Enlil appears to be listening, she actually considers Hikari's act as a betrayal, then gets mad and assumes her true form; A giant, angelic, eagle-like god with masculine features. Despite the party's greatest efforts, she begins to wipe out combat members until the navigators and Hikari remain. Despite the navigator's warnings, Hikari confronts Enlil alone. While at first she chastises her, the administrator god quickly becomes unresponsive and was left open to a unison attack by the four protagonists.
Enlil is now defeated in complete disbelief, but the paety alongside all of the people trapped in the district persuaded her to give up. Losing support from the masses, she transforms back into the black haired Nagi and admits that she has saw the greatest potential of humanity, then vanishes into light. Due to the lack of a master, the street is engulfed by a bright light and all of the trapped return to their realities, with the Persona users and Hikari saying farewell with each other and parting back to reality afterwards.
- The Labyrinth might reference Etrian Odyssey's , which is a massive tree that acts as a Labyrinth and a major plot element, as the Cinema Street is actually a series of branches flowing negative films into Cinemas with the bottom-most projectors acting as its roots, referencing the trees polluting themselves over time.
- The Theater District also mirrors the fake Yasogami High School in Persona Q: Shadow of the Labyrinth, as the fake Yasogami high is filled with phantoms that Zen conjured to make Rei feel more comfortable, the walls/cinemas of the Cinema Street are filled with real people that Enlil attempted to relieve their depression but inversely worsen their negative impulses.