Axel and Roxas spent a bit of time in Hollow Bastion regrouping and waiting for their worlds to merge properly. After that, they went off to the Land of Dragons, where they inspired Mulan to do the right thing, and also got some cool rewards for it.
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Axel tagged along with Roxas and the King's Goonies and walked through Beast's Castle, then said hello to Hercules and Phil at Olympus Colosseum. After a Nobody ran away from them, they managed to finish the undead sidequest there and visited Disney Castle briefly. Nice place. Overrun by Heartless. WAAAAAAAAAH. The only way to save it was to go back in time, to Timeless River.
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After putting together the clues and righting the past, they returned to Hollow Bastion to regroup. Axel took the gummi ship by himself to Agrabah in order to track down a lead on Riku, a rogue-ish Organization member (next to Sora, that is). They exchanged some words and fought, but Riku got away, leaving Axel with an uneasy feeling as to whatever the Org was planning. Were they trying to lure Sora, Roxas' Nobody, out into the open? Or something else?
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Soon enough Axel and Roxas went to Agrabah for real and helped Jasmine and Aladdin with what could have been the... return of Jafar. Cough. Axel mused about double standards.
Then he was told that he'd have to fight Roxas to the death. Axel pretended to be a bad guy. Roxas didn't believe him and killed himself so that Axel would be spared. As a result, Axel is now the Keyblade Master... again. He is very FML right now.