In the film's finest sequence, as they start to go back toward the spiral iron staircase, the subjective camera becomes Poelzig and follows his path. Poelzig gently talks to the broken doctor in a memorable, world-weary monologue, comparing them both to living ghosts of the war:

Come, Vitus. Are we men or are we children? Of what use are all these melodramatic gestures? You say your soul was killed and that you have been dead all these years. And what of me? Did we not both die here in Marmorus fifteen years ago? Are we any the less victims of the war than those whose bodies were torn asunder? Are we not both the living dead? And now you come to me, playing at being an avenging angel - childishly thirsty for my blood. We understand each other too well. We know too much of life. We shall play a little game, Vitus. A game of death, if you like. But under any circumstances, we shall have to wait until these people have gone, until we are alone.

Poelzig retires to his veiled bedroom, and tells the blonde woman lying next to him in bed, young Karen Werdegast [Karen's daughter - both Karens are played by Lucille Lund!], his step-daughter, as she falls back asleep that she is "the very core and meaning" of his life:

Oh, it's nothing. Only an accident in the road below. I want you to stay in this room all day tomorrow, Karen. You are the very core and meaning of my life. No one shall take you from me. Not even Vitus, not even your father.

Werdegast is still not aware that his daughter Karen has succeeded her late mother as Poelzig's mistress/wife. In Werdegast's bedroom, the doctor's servant draws a knife, but Werdegast instructs him to put it away until he is told otherwise. Because the house is dangerously rigged with dynamite, they must be patient and discreet. In the meantime, Thamal must pretend to be Poelzig's servant:

We must bide our time until others aren't involved. This place is so undermined with dynamite that the slightest mistake by one of us would cause the destruction of all. Until I tell you different, you are his servant, not mine.

In bed, Poelzig reads a book describing the Rites of Lucifer:

In the night, in the dark of the moon, the High Priest assembles his disciples for the sacrifice. The chosen maiden.

The next day - a sunshiny one, both Werdegast and Poelzig show an obvious interest in Joan's health - although she remembers nothing following the accident, she has recovered fully. In Joan's room, Poelzig's eyes linger a long time on Joan - she senses his interest in her and modestly covers herself. Dr. Werdegast is invited to a Black Mass that will be performed the next night. Joan's destiny is to be determined in a game of chess - what Poelzig had earlier called "a game of death." Over an ornate chess game on a table, the two challenge each other to a deadly game of chess, gambling over Joan's fate. The outcome of the game will determine whether Joan will be sacrificed as part of the Black Mass ritual:

Poelzig: You're interested?
Werdegast: Maybe.
Poelzig: I thought so. Well I'm not. Only spiritually.
Werdegast: Spiritually?
Poelzig: Tonight, it is the dark of the moon. We shall gather and...You had better come Vitus. The ceremony will interest you.
Werdegast: Don't pretend Hjalmar. There was nothing spiritual in your eyes when you looked at that girl. You plan to keep her here.
Poelzig: Perhaps. (With his little finger, he caresses the breasts of the Queen, one of the chess pieces)
Werdegast: I intend to let her go.
Poelzig: Is that a challenge Vitus?
Werdegast: Yes, if you dare to fight it out alone.
Poelzig: Do you dare play chess with me for her?
Werdegast: Yes. I will even play you chess for her - provided if I win, they are free to go.
Poelzig: You won't win, Vitus.

Because Joan feels well enough to leave and very uncomfortable in the house, Peter senses that they should go. After a few minutes of romance, the couple poke fun at Poelzig's name and make plans to leave after packing. Two gendarmes enter the residence and ask for a report on the accident, interrupting Poelzig's and Werdegast's game. Each of the comedic characters extol the grandeur and charm of their respective home villages during the conversation. Peter informs Poelzig of the couple's intentions to leave: "Mrs. Alison and I must get back down to Vizhegrad. You see, Mrs. Alison must communicate with her parents in Vienna." The game of chess is resumed. Peter graciously thanks host Poelzig for his hospitality and asks for transport to Vizhegrad. Poelzig's servant returns with news that "the car is out of commission. It will take some time to repair it."

When Peter is led to the telephone to make a call to the hotel in town, he discovers that the phone is dead. Poelzig cleverly chooses his words to tell Vitus:

Did you hear that, Vitus? The phone is dead. Even the phone is dead.

Sensing some danger and realizing that they are trapped, Peter is determined to leave and warns Joan: "Come along Joan. We're getting out of here fast...We're leaving if we have to walk to Vizhegrad." They descend the staircase (leaving their baggage behind) just as Werdegast is check-mated in their game of fate, a struggle between Death and Life. Poelzig wins the game and Joan:

You lose Vitus.

As Peter and Joan attempt to leave the main entrance, Peter is struck unconscious on the back of his head by Werdegast's servant Thamal (who has been ordered to obey Poelzig for the time being). Joan reacts by screaming and fainting. She is held prisoner and locked up in the upstairs bedroom. Werdegast is concerned, but helpless as he looks on passively: "I hope you won't carry this too far Hjalmar." Peter is deposited in the old gun turret room down in the cellar.

Triumphant over his chess victory and the successful kidnapping, Poelzig plays a Bach toccata on the great organ in the main room in the terrace, venting his emotions and waiting until darkness falls. The fortress reverberates with the thunderous chords of the solemn music. With the key to Joan's bedroom, Werdegast lets himself in and tries to assure her that he is on her side. He warns what Poelzig's intentions are:

Werdegast: We are all in danger. Poelzig is a mad beast, I know. I know, I've seen the proof. He took Karen my wife and murdered her. And murdered my child.
Joan: And you let him live?
Werdegast: I wait my time. It shall be soon, very soon. Until then, I must do his bidding. That is why even my servant obeys him. Did you ever hear of Satanism, the worship of the devil, of evil? Poelzig is the great modern priest of this ancient cult, and tonight, the dark of the moon, the rites of Lucifer are celebrated. If I am not mistaken, he intends you to play a part in that ritual! A very important part. (Terrified, Joan jumps up and seeks a protective embrace.) There child. Be brave, no matter how hopeless it all seems. (The organ music ceases. Werdegast looks around warily) Be brave.

After leaving her room, Werdegast finds Poelzig waiting for him at the bottom of the stairs. He must turn over the key to Joan's room. After a black cat scurries by, Poelzig's beautiful blonde wife Karen (Werdegast's grown daughter) enters Joan's room through a connecting door by accident. She identifies herself as 'Karine' or 'Kareen', "Madame Poelzig" (Poelzig's wife):

Joan: Karen! Not Karen Werdegast?
Karen: Yes, yes, how did you know my name?
Joan: Well I, I know your father.
Karen: Oh no, you are mistaken. My father died in prison. Herr Poelzig married my mother. She died when I was very young.
Joan: And he married you? You're his wife? (Poelzig overhears the conversation)
Karen: Yes.

Joan explains that Karen's father, Vitus Werdegast, did not perish in the destruction of Marmaros when she was a young girl. Joan tells her that her father is indeed alive and is attempting to rescue her: "Karen, do you understand me? Your father has come for you." Poelzig enters the room, picks the black cat up in his arm, and gives Karen a murderous stare. He forces her to wordlessly leave the room. In the adjoining room (offscreen), Karen protests and screams, emitting muffled, terrified screams. [Poelzig hastily and cold-bloodedly murders his wife, his own step-daughter, for not staying secluded and for disobeying him.]

On his balcony in a fierce, menacing wind as dark clouds race across the sky in front of the moon, Poelzig stares up into the heavens. One of the servants exclaims that they must hurry to prepare things for the ceremony before the satanic cult guests arrive: "the dark of the moon - this is the night."

That night, guests for the Satanistic ceremony begin to arrive at the fortress, in one of the most expressionistic scenes in the film. Poelzig presides in a high priest's black robe with white collar and descends the staircase to greet them. The cultist participants are in evening dress - the men in black tuxedos and the women donned in white during the ceremony. Poelzig leads the devil-worshipping cult into the main hall of his house, including Werdegast as one of the invited guests.

During the Black Mass ceremony, Poelzig stands on a simple altar behind a sideways double cross. In fragmented Latin, he speaks the words of the Mass to the assembled devotees, as the organist plays. Joan is carried in, struggling and protesting that she is being kidnapped against her will. She faints upon the two beams of the cross on the altar as Poelzig chants a litany over her body, offering her soul and body to Satan. She is to be a human sacrifice to the Devil.

In the climactic finale, one of the female cultists screams and collapses in a faint from all the excitement, interrupting the solemn ceremony. Realizing his opportunity during the distraction, Werdegast (with the help of his servant Thamal, now freed from Poelzig's hypnotic control) manages to rescue Joan from the cross. They sneak away and escape down the twisting metal staircase into the underground tunnels. Meanwhile, Peter has escaped but is knocked out by the majordomo. Thamal kills Poelzig's housekeeper/majordomo but is shot and mortally wounded. Joan manages to tell Werdegast that Karen is still alive and married to Poelzig!

Werdegast: Karen is dead.
Joan: No! I mean Karen, your daughter. Madame Poelzig.
Werdegast: What do you mean? (He shakes her and goes beserk.)
Joan: She's alive, here in this house! She's Poelzig's wife!

In Fort Marmorus' control chamber in the underground laboratory, Dr. Werdegast frantically searches for his daughter, but his joy is short-lived. In the embalming room, he removes a sheet from a slab and sees the body of a girl - Karen. He lets out an agonizing cry upon seeing the corpse of his daughter on the operating table. Poelzig, who by this time has left the cult ceremony and tracked them down into the catacombs, comes upon Werdegast and attacks him. During their life-and-death struggle, Thamal, still barely alive and with blood dripping out of his mouth, overpowers Poelzig. Then, Thamal drops dead.

In revenge for his atrocities, Poelzig is suspended upon and shackled to an embalming, torture rack where he is stripped of his robes and prepared for being skinned alive! With a mad, delirious gleam in his eyes, Werdegast rants and raves about what he is planning to do to the Satanist on his own embalming rack:

Do you know what I am going to do to you now? No? Did you ever see an animal skinned, Hjalmar? Ha, ha, ha. That's what I'm going to do to you now - flay/tear the skin from your body...slowly...bit by bit!

From a surgical table, Werdegast selects a scalpel for the operation. Joan screams when she realizes she will be witnessing a live skinning. Slowly and bit by bit, the doctor slices skin with a scalpel from his face (the skinning is filmed as a dark shadow play in black images of manacled hands on the wall), asking sadistically: "How does it feel to hang on your own embalming rack, Hjalmar?"

Meanwhile, Peter regains consciousness and bursts into the scene after hearing Joan's screams. Through the chamber's locked gate, he entreats Joan to get the key to the door from the hand of Thamal, the now-dead servant. Pausing for a moment, Werdegast leaves the gruesome skinning and helps to pry open Thamal's tightly-closed hand to help the Alisons escape. Misunderstanding and mistaking the doctor's actions and intentions as menacing toward Joan, Peter shoots Werdegast with a revolver through the door's grillework. Joan tells her confused husband that Werdegast was on their side: "He wanted to help us."

Wounded and dying, Werdegast speaks to the couple, sinks to the floor, and then begs them to go, calling Peter a "fool" for shooting him: "You poor fool. I was only trying to help. Now go! Please go!" As they dash out, Werdegast approaches a large bank of instruments and switches on the wall. He prepares to grab one of the hidden switches in the wall and threatens to detonate the explosives left over from the war:

It's the red switch, isn't it, Hjalmar? The red switch ignites the dynamite. (He activates one of the large switches.) Five minutes and Marmaros, you and I, and your rotten cult will be no more...

As the couple escapes, Werdegast throws another switch. Providing an epitaph for the two dying men, Werdegast's final words are:

It has been a good game.

Peter and Joan make their way through the fortress to the road. Behind them, dynamite explosions ignite and explode, reducing the house to rubble. They flag down an oncoming car.

In the film's postscript, the Alisons are on a train back to Budapest. Peter notices a mixed review of his latest mystery, Triple Murder:

In Triple Murder, Mr. Alison's latest mystery thriller, he fulfills the promise shown...We feel, however, that Mr. Alison has, in a sense, overstepped the bounds of the matter of credibility. These things would never, but with a further stretch of the imagination, actually happen. We could wish that Mr. Alison would confine himself to the possible instead of letting his melodramatic imagination run away with him.

He looks, with ironic amazement, at his wife as the screen dissolves to black.