The 12 bakers are divided into the Nice Team and the Naughty Team and Jesse Palmer challenges each team to create an edible holiday village; judges Duff Goldman, Nancy Fuller and Kardea Brown decide which baker from the losing team gets eliminated.

Jesse Palmer challenges the Naughty and Nice teams to make holiday cocktail and mocktail desserts; then, the bakers create meringue-based desserts that are either cheerful or cheeky, to impress judges Duff Goldman, Nancy Fuller and Kardea Brown.

Jesse Palmer asks the teams to create over-the-top holiday wreath desserts and the team who won the previous challenge gets to pick a naughty or nice advantage; judges Duff Goldman, Nancy Fuller and Kardea Brown decide which baker goes home.

Jesse Palmer challenges the nine remaining bakers to make holiday pies with no repeated flavours among their own team. Additionally, each team must select only their best two pies for tasting by judges Duff Goldman, Nancy Fuller and Kardea Brown.