"The Last Newhart" (airdate: 5/21/90), directed by Dick Martin; written by Mark Egan, Mark Solomon, and Bob Bendetson.
Newhart boasts one of the most memorable series finales in television history, entitled "The Last Newhart." The entire town is purchased by a visiting Japanese tycoon, who plans to turn the hamlet into a huge golf course and recreation resort. The lone hold-outs are Dick and Joanna, who keep their property thanks largely to Dick's refusal to play along with what he views as the latest demented whim of the townspeople. Everyone else takes their huge payoffs, says their final good-byes while recreating a scene from the musical Fiddler on the Roof, and leaves Dick and Joanna to run the Stratford Inn.
Five years pass. Dick continues to grimly run the Stratford, while golf balls constantly pelt the walls. Joanna dresses like a geisha, and the Japanese replacements for George and Stephanie are even less helpful than the originals.
The ex-townfolk — richer and odder than before — unexpectedly pay the Loudons a visit. Michael and Stephanie's daughter has grown up to be a tiny clone of her mother. George has spent the last five years continually losing and gaining twenty pounds, until he spent some time with a group of Native Americans and smoked a peace pipe (at which point he no longer cared about his weight issues). Larry, Darryl and Darryl have all married obnoxiously talkative and abrasive women from Long Island (one of whom is played by a then-unknown Lisa Kudrow). When their wives will not shut up, the Darryls yell out in unison, "QUIET!" Aside from Larry, who had always commented on how talkative they were, this moment is the only time on the show that anyone has ever heard The Darryls say a word. Everyone is stunned (even the studio audience erupted) and when Dick asks why the brothers have never spoken in public before, Larry posits that it is because 'they've never been so PO'ed before!'
Things quickly become chaotic, with the visitors cheerfully deciding on an extended stay at the inn. Dick vents his frustration at how unmanageable and stupid everything has become, but nobody is interested in Dick's opinion, so he announces that he is finally fed up and is leaving for good. As he storms out the door, Dick turns around and says, "You're all CRAZY!" Just then, he is struck by a wayward golf ball and collapses, unconscious. The screen goes black.
Then a light is turned on, and viewers see Dr. Bob Hartley in bed, saying, "Honey, you won't believe the dream I just had." Emily (Suzanne Pleshette, Hartley's wife from The Bob Newhart Show) turns on the light and rolls over to speak with him. The bedroom is a recreation from The Bob Newhart Show, and — in a parody of a 1980s television vogue — the entire Newhart series (and presumably Dick Loudon's entire existence) is revealed to have been nothing more than a dream in the mind of Bob Newhart's 1970s character. Bob tells Emily that in the dream, he lived in a weird Vermont town surrounded by strange people: a snobbish maid and her alliterative husband, a dense handyman, and three eccentric woodsmen, two of whom were mute.
When he reveals, in passing, that he was married to a beautiful blonde in the dream, an annoyed Emily attributes dream to some Japanese food he ate before bedtime and tells Bob to go back to sleep before flicking off the light on her side of the bedroom. Reviving a technique from The Bob Newhart Show, in which one of the Hartleys incredulously flicks back on a bedside light and restarts the conversation, Emily turns her light back on and inquires, "What do you mean, 'beautiful blonde'?!?" Bob tells her to go back to sleep, commenting, "You should wear more sweaters," something Joanna was noted for. The scene ends to the strains of the old Bob Newhart theme song and credits in the old Bob Newhart font style (although this was removed for syndicated reruns) and long, thunderous applause. In the MTM logo shown with the closing credits, Mimsie the Cat says what the Darryls shouted in the series finale. The scene was crafted as a satire of the 1986 episode of Dallas in which an entire season of the series was explained away as a dream.
In 1991, the cast of The Bob Newhart Show reunited in a prime-time special. One of the things they did was analyze Bob's dream. During the discussion, the Hartleys' neighbor, Howard Borden (Bill Daily), recalled, "I had a dream like that once. I dreamed I was an astronaut in Florida for five seasons", as scenes from I Dream of Jeannie featuring Daily were shown. (Jeannie ran for five years on NBC.) The building's janitors resembled Larry, Darryl and Darryl.
In his book I Shouldn't Even Be Doing This! And Other Things that Strike Me as Funny, Newhart stated that his wife Ginnie proposed the classic ending of Newhart.
A letter from Mark Egan, Mark Solomon, and Bob Bendetson, the show's executive producers, said the idea was from the show's writers, specifically Dan O'Shannon, who suggested the idea the previous year.
In November 2005, this episode was named by TV Guide and TV Land the most unexpected moment in TV history. The episode was watched by 29.5 million viewers.