The entire narrative of "American Beauty" is framed by the spoiler that its narrator, Lester Burnham, will be dead by the end of the year. This foreknowledge shifts the audience's focus from 'what' will happen to 'how' and 'why'. It transforms the film into a tragic mystery and a philosophical reflection on the final year of a man's life.
The central plot twist revolves around the identity of Lester's killer. Throughout the film, multiple characters are presented as having the motive and means to kill him. Jane and Ricky fantasize about it; Carolyn buys a gun and is shown driving home in a rage after discovering Lester's rejection of her materialistic values; Angela is humiliated by him. The ultimate reveal is that the killer is Colonel Frank Fitts. This twist re-contextualizes the Colonel's character entirely. His violent homophobia is revealed to be a product of his own deeply repressed homosexuality. After misinterpreting Lester's kindness as a come-on and being gently rejected, Frank's self-loathing and shame boil over into murderous rage. He kills Lester not for any of Lester's actions, but because Lester becomes a mirror for what Frank hates and fears within himself.
Another crucial reveal is Angela Hayes's virginity. Her confident, sexually experienced persona is a facade to mask her deep-seated insecurity and fear of being ordinary. When she finally offers herself to Lester, her confession shatters his fantasy. This is the catalyst for Lester's final transformation. He stops seeing her as a sexual object and connects with her as a vulnerable human being, a fellow 'kid'. In this moment of paternal tenderness, he finds redemption. His subsequent death is therefore not a punishment for his transgressive desires, but occurs at the precise moment he has achieved a state of grace and happiness, making the ending both tragic and beautiful.