The film's setup builds steadily: ships disappear, Godzilla is identified as a prehistoric creature disturbed by H-bomb testing, and it attacks Tokyo, leaving the city burning and hospitals full of radiation victims. Conventional military weapons fail.
The central twist concerns Serizawa's secret. He has invented the Oxygen Destroyer, a device that removes oxygen from water, suffocating organisms and then dissolving them so that nothing is left. Emiko has seen it demonstrated and promised to keep it secret. Faced with the suffering in Tokyo, she tells Ogata. Serizawa refuses at first, afraid that once the device is used, the world's governments will force him to make more of it, just as happened with the atomic bomb.
Moved by the images of the victims, he agrees to use it only once and burns his research. He and Ogata dive into Tokyo Bay. After setting off the device, Serizawa cuts his own lifeline and dies with Godzilla, so the secret dies with him. Godzilla dissolves down to a skeleton and then disappears.
Hidden meaning: The ending is a victory without triumph. The only thing that can defeat the "bomb" is an even more terrible weapon, and the only way to stop that weapon from spreading is for its inventor to die. Yamane's closing warning, that if we continue conducting nuclear tests, another Godzilla might appear, turns the whole story from a creature feature into a warning aimed straight at the audience's own world.