Chapter 586 is titled "A Fetid Town".
Sabo returns to his parents' house by force and he meets his new adopted brother, Sterry. Meanwhile Ace and Luffy help the Bluejam Pirates distribute cargo throughout the Gray Terminal. Later Sterry gleefully reveals to Sabo that the King plans on burning down the trash at Gray Terminal, including all those that live there. It turns out the cargo from earlier was actually explosives, because Bluejam had supposedly struck a deal with the King in order to become a noble. That night the explosives are set off and Ace and Luffy end up trapped in the great blaze while Sabo desperately tries to get to them.
Whilst Luffy and Ace are in the custody of the Bluejam Pirates, Bluejam reveals that he wished he was born a noble, and that if they are truly brothers, they will not go looking for Sabo. Luffy and Ace join the Bluejam Pirates at the request of the Captain, and then carry cargo to marked locations in Gray Terminal with other pirates. Meanwhile Sabo, accompanied by his father, is being questioned for the crimes he has committed. His father urges him to place all the blame on Luffy and Ace to save his family's name, however Sabo refuses and is hit to the ground, and his father is forced to bribe the officer with a stack of bills.
Sabo returns home with his father, and is greeted by his mother and newly adopted brother Sterry. Sterry tells Sabo that Gray Terminal will be burned to ash along with its inhabitants, and that this had been planned for months in accordance with the arrival of the Inspection Unit, and Celestial Dragon. Sabo escapes from the family manor at night, and overhears a group of Royal Guards discussing the plan. It is revealed to Sabo in their discussion that the burning of Gray Terminal will proceed tomorrow, and that the Bluejam Pirates will be behind the act.
The next day Sabo escapes the manor and travels the streets of High Town, to find that all the nobles are aware of the impending massacre. His father sends out a search party, and soon two Royal Guards start to chase after Sabo. Meanwhile Bluejam reveals to Luffy and Ace that the cargo they had carried was oil and gunpowder, and that Gray Terminal will be set alight that day. Luffy and Ace react in outrage and are quickly apprehended by Bluejam's pirates, Bluejam informs them that they can no longer be left alive, then asks where their hoard of treasure is located.
Later that night, the inhabitants of Edge Town, the Town Center and Mt. Colubo all bear witness as the monstrous inferno rages. Royal Guards usher the citizens of Edge Town into the Town Center, while the inhabitants of Gray Terminal flee in terror, only to find that every exit is blocked by the blaze. The Bluejam Pirates stand just outside the Great Gate of Goa surrounded by the fire, as it is revealed that they will receive titles from the King, become nobles, and live in High Town as payment for their services. However the gate will not open for the pirates, as Bluejam realizes that their bargain had been betrayed, and that they have been left to die.
Meanwhile Luffy and Ace manage to cut themselves loose after being bound to a tree, whilst surrounded by the encroaching flames. In the Town Center, rumor had circulated amongst citizens that the Bluejam Pirates were responsible for the atrocity, in an attempt to halt the Inspection Unit and Celestial Dragons from visiting the island. Sabo is chased by the Royal Guards and is noted as being the last citizen remaining in Edge Town. While running he crashes and falls to the ground, but is helped to his feet by an unknown cloaked person. In a frenzy Sabo tells the person of the atrocity that the nobles had concocted, and that he is ashamed of being born a noble.
It is revealed that the cloaked individual is none other than Monkey D. Dragon, as he informs Sabo that he feels he understands his pain as he too was born in Goa Kingdom. Dragon then follows by saying that he still lacked the power to change it, and will listen and remember Sabo's story at the boy's plea. Luffy and Ace are seen fleeing from the engulfing flames, as an individual wearing high-heels informs Dragon that preparations have been made, in a dialect similar to that of Emporio Ivankov.
- Sterry is introduced.
- On Ace's t-shirt is written the word 辻斬 (Tsuji-giri, crossroads killing). It is a Japanese term for when a samurai attacks a random person to test his new Katana.
- The Gray Terminal is set ablaze.
- Monkey D. Dragon appears and reveals that he was born in the Goa Kingdom.