Eriol appears in the second arc, and he unleashes a series of events that will help to give the closure to this time of Sakura's life. He seems to be a regular, kind, eleven year-old transfer student from England. Is he, though? We know he isn't, but the main characters ignore he's the one behind the shadows. He's no other than Clow Reed's reincarnation, and a man on a mission.
The first time we get to see him and his guardians is mostly foreshadowing (their silhouettes in anime, an obscure dream in manga.) We know he means trouble, that's obvious. So there's no surprise we get to see he's a new fifth-grade student in Sakura's class. He quickly introduces himself to the Card Mistress -it's an encounter he had been waiting for his entire life- and they became friends. Li Syaoran didn't like that one bit.
And then the chaos is ensured. A lot of bizarre situations take place through the city, joined by Clow's presence. Eriol is behind it, and since he was Clow on his past life, his magic powers and memories were inherited by him. Because of that, the rest of the magical cast is deceived and think Clow is behind it. Which is somehow true, sure, but not accurate. And that's the plot for this arc: Eriol does things behind them, Sakura changes one or more cards with her powers to stop the anonymous force and the day is saved.
Sakura and her friends never suspect on the British guy (except maybe Touya in the anime). He infiltrates even more on her group of friends, and takes a chance whenever he can. But still, we get to know he doesn't like to see Sakura sad, which seems a contradiction in an antagonist. And then we get to the final battle. Depending of the canon source, it's either on the Tokyo Tower -CLAMP's favorite fetish- or the Tsukimine shrine.
Finally, he reveals to Sakura as the author of everything, the one who was Clow in his past life. He casts the biggest spell, and hides the sun and the moon, causing the entire city -well, not the entire thing, but almost- to sleep. He looks rather cruel in that episode/chapter, but he has a point. If he didn't pressure Sakura and went easy on her, she wouldn't be able to recover from the shock. So he and his guardians attacked them, so Sakura is unable to go easy on him. The answer for his challenge: she has to change The Light (and the Dark) in order to break the spell. And after she does... it's all over. Later on he provides explanations and leaves again to England to make way for the finale. Cue happy ending.