According to a new novelization of Star Wars: The Rise of Skywalker, C-3PO now remembers the entirety of the Skywalker saga. The droid duo of C-3PO and R2-D2 are ever-present throughout the original Star Wars trilogy, from the moment Princess Leia records her famous message to Obi-Wan to the jubilant celebrations on Endor. It was curious, however, when the droids returned for the prequels, and Threepio's maker was revealed to be Darth Vader himself, Anakin Skywalker. This opened up a host of questions, such as why the droids wouldn't just tell Luke Vader was father, but that problem was addressed when C-3PO's memory was wiped in Revenge of the Sith by Bail Organa to avoid any secrets slipping from the notoriously chatty robot's mouth. Why R2-D2 didn't reveal anything remains a mystery even to Mark Hamill.
This means Threepio enters the original Star Wars trilogy with no idea of the preceding events he was directly involved in, and he continues to travel alongside Luke Skywalker and the Resistance until the final installment of Disney's sequel trilogy, The Rise of Skywalker. In one of the film's better scenes, C-3PO must translate a forbidden Sith text, but is prohibited from doing so by his programming. In order to get the translation his friends need, Threepio volunteers to have his memory wiped again in a hard reset by Babu Frik. Despite being the most emotive moment in the film, C-3PO's memory is easily restored by R2-D2 in the final act. Thank the Maker for cloud storage.
While The Rise of Skywalker implies R2-D2 restored his best friend's memories up until the point they were erased on Kijimi, the new junior novelization of the movie by Michel Kogge goes a little further. One passage reads:
This caused a memory file that R2-D2 had restored to be accessed and read. It was a record of the moment when C-3P0's maker had fitted a photoreceptor into his eye socket and he had experienced the visual spectrum for the first time. The initial image his photoreceptors had captured was of a blue-and-white astromech.
In this version of events, R2's deux ex backup goes deeper into C-3PO's storage banks and reawakens his entire memory from the initial switch-on by a young Anakin in The Phantom Menace. This means Threepio would now remember the identity of Darth Vader, the events of the Star Wars prequels, and Luke and Leia being siblings. All decades too late, of course. However, Kogge does add the touching note of R2 being the very first thing Threepio saw. Since C-3PO's full memory restoration comes from an official Disney source and doesn't contradict anything in the Rise of Skywalker movie (the backup's effect was never explicitly stated), this can likely be considered official canon.
The junior version of The Rise of Skywalker's novelization seems to be following its grown-up counterpart by filling in the many gaps left by the movie's plot. The Rise of Skywalker was widely criticized for being vague about Palpatine's resurrection, the Final Order, the Force dyad between Kylo Ren and Rey, and much more. Disney appeared to acknowledge those shortcomings by explaining some of them in book form - Palpatine was a clone, his disciples built the Star Destroyer fleet, Rey repaired Luke's X-Wing before flying it to Exegol, etc. The additional information came thick and fast and apparently hasn't dried up just yet.
In fairness, the restoration of C-3PO's memory wasn't something fans were questioning a great deal after The Rise of Skywalker's theatrical release, but it was a moment that drew criticism. C-3PO's decision to sacrifice his memory banks was a key moment in the final film of the Skywalker saga and proved to be a lump-in-throat scene for even the most hardened Star Wars fan. Undoing the process only dilutes the original impact, and many have since argued that the memory loss should've been a permanent change for Threepio. While the new novelization can't go so far as to fix that error, the sentimental connection between the two iconic droids softens the blow a little.