James dropped the WWE Women's Championship on August 14 to Lita, after Lita hit James with the title belt. After the Women's Championship was vacated due to the retirement of Trish Stratus, James entered a tournament to determine the new champion. She defeated Victoria and Melina en route to the finals at Cyber Sunday, where she lost to Lita. James transitioned into a face after she and Lita wrestled in a series of matches in which Lita chose stipulations to hinder Mickie's wrestling ability. The feud between James and Lita ended at Survivor Series, where James defeated Lita, in the latter's retirement match, to win her second Women's Championship.