When she is cornered by the Black Knight, she performs a summoning ritual and summons Sonic down from above. They then flee before Sonic has a chance to square off with the Black Knight. Merlina then helps Sonic recover the sword Caliburn from the cliffside at the Misty Lake. She then tells Sonic that due to everyone knowing her appearance, she must hide in order to keep the enemies off her. She then disappears before reappearing right before Sonic and the Black Knight face off for their final battle. When Sonic defeats him in a one on one sword fight, Sonic watches as he mysteriously fades away like he was one of his own minions.
It's at this point that Merlina is revealed to be the true villain of the story. She reveals her dark intentions after Sonic returns with the Black Knight's scabbard and she uses a dark magic to begin consuming the lands. Sonic and the Royal Knights are forced to flee before the Lady of the Lake tells about how to stop her. They bring their swords to each of the four shrines across the lands to form a barrier, but it is too weak. Still, Sonic and Caliburn rush back and enter the Dark Hollow, where they find Merlina transformed. Merlina reveals that her plan was to undo her grandfather's "mistake" and keep the world of King Arthur alive (the opposite of Erazor Djinn's intentions in Sonic and the Secret Rings as he wanted to erase the Arabian Nights world). She told Sonic that she already knew how their kingdom would fall and said that she did not want that to happen. Furious at Merlina's words, Sonic attacks her but she generates a barrier that Sonic cannot break through and seriously wounds him.
Merlina then summons a monstrous creature that appears as the Black Knight with more arms wielding massive swords. While Sonic tries to reason with Merlina and stay alive, Caliburn is broken in half during the process. As the Knights watch Sonic suffer at Merlina's whim, they shout to him to surrender. His "never give up" attitude shines brighter than ever and he uses the true power of Caliburn and the rekindled Light of the Sacred Swords to transform it to Excalibur and himself into Excalibur Sonic. He then faces Merlina, transformed into The Dark Queen as the final boss. During the fight, she questions if Sonic's intentions behind trying to stop her is to see the end of the world and talks about how Sonic cannot comprehend why such beauty as her world should last for eternity, only for Sonic to reply that a world without an end just sounds "boring" to him and that his stories will never end as long as he continues to run. Breaking through her defenses and delivering the final blow with Excalibur, the Dark Queen evaporates into flames, the kingdom begins to settle, and Merlina is rendered powerless.
Sonic approaches Merlina and claims that while every world eventually has it's end, people just need to live their life to the fullest until then. Merlina takes the flower Sonic picks for her and thinks of her grandfather as the game comes to an end.
- Merlina bears a strong resemblance to the ring genie Shahra but with different skin colour, red hair, a tiara with a red jewel at the middle, and a longer ponytail. However, when seeing her full image on the game's main page, the hairstyle around her forehead is the same style as Shahra.
- Merlina happens to share her name with a character from Super Paper Mario.
- Many have commented that Merlina bears a close resemblence to Zelda, of the Legend of Zelda games. It could be possible since she and Zelda have similar hairstyles, ear and eye shapes. Also, both use magical powers to aid the hero.
- Merlina is the very first major villainess Sonic takes on and defeats in any game. This makes Merlina the first female boss Sonic has fought (not counting Team Rose from Sonic Heroes which was just Amy trying to get Sonic to admit he loved her). Sonic also fought Blaze the Cat, but she was a little confused.
- Merlina is one of the few final bosses (along with Chaos, Metal Sonic and Dr. Eggman) to survive their final battle with Sonic. She is also the first villain to change her outlook on everything and revert back to good, which still technically makes her Sonic's friend and not his enemy.
- Merlina is the first villain to have good intentions as a motive as all she wanted was to preserve the beauty of King Arthur's land forever. However, as Sonic says, all worlds must come to an end at some point.
- Interestingly, when Merlina summons Sonic, she uses the same spell Erazor Djinn used to summon the Ifrit in Sonic and the Secret Rings.
- Another interesting fact about Merlina is that her ultimate goal is almost similar to Tikal as she wanted to protect her people as well as protect her Chao friends and Chaos. But both plans fail and while Tikal's tribe was nearly wiped out by the monster Chaos, Merlina survived and so did her world.