In the Bates Motel office, Sam insinuates that Norman would try to unload the Bates Motel if he had the chance, to which Norman responds, "this place happens to be my only world." He claims to have had a very happy childhood. Inside the Bates home, Lila walks around Norman's childhood room, in which the small single bed looks as though it had recently been slept in. It is filled with toys. Downstairs, Sam and Norman's conversation is getting more heated. Finally, Norman tells Sam to get in his car and drive away, and Sam responds by openly accusing him of stealing the $40,000. Suddenly, Norman realizes that Lila has gone into the house and panics. He knocks Sam over the head with a vase and runs outside. Lila sees him coming and hides.
Norman enters the Bates house and rushes upstairs, thus giving Lila the chance to continue downstairs into the cellar. When she reaches the dank and dusty room, she sees the figure of an old woman slouched in a chair, her back turned to Lila. Lila approaches her slowly, saying, "Mrs. Bates". She touches the old woman's shoulder and turns her around - revealing that it is only a skeleton in a wig and a dress. Lila screams and just then, Norman charges into the cellar wearing a grey wig and one of his mother's dresses, with his knife in his hand and a maniacal grin on his face. Before he can attack Lila, however, Sam wrestles Norman to the ground and disarms him. The scene ends with a closeup of Mrs. Bates's shriveled skull.
It is nighttime and a crowd is gathered in front of the County Courthouse in Fairvale. Inside, Al Chambers is sitting with Sam and Lila, while Dr. Fred Richman (Simon Oakland), a psychiatrist, is interviewing Norman in another room. Moments later, Richman comes out and announces that Norman Bates no longer exists. His "mother" persona has taken over and has confessed to murdering Marion and Arbogast and hiding their cars in the swamp. It turns out that Bates killed two other Fairvale women as well.
Richards explains that when she was alive, Mrs. Bates was always clingy and demanding. When she took a lover, Norman became jealous, which drove him to kill both of them. After committing matricide, Norman stole his mother's corpse, hid her body in the fruit cellar, and convinced himself that she was still alive. He had conversations with his mother and, at times, became her completely. Because he was so jealous of his mother's sexual needs, Norman imagined that this mother would be equally jealous of his own. Therefore, whenever Norman found himself attracted to a woman, the "mother" side of him would take over and "go wild". Dr. Richman points out that Norman was attracted to Marion, and therefore, his "mother" became jealous and killed her. Afterwards, Norman reverted to himself and dutifully cleaned up the mess. Richman reveals that Norman did not even know about the $40,000, and that it's likely in the swamp. "These were crimes of passion, not profit," Richman explains. Just then, another cop enters the room and says that Norman feels chilly, asking permission to bring him a blanket.
The camera follows the cop as he goes down the hall, but stops short of entering the cell. A woman's voice responds, "thank you." Cut to Norman sitting on a stool in the naked room, huddled under the blanket. His mother's voice echoes in his head, regretting that she turned in her own son. "They'll put him away now, as I should have, years ago", she says. She refuses to take responsibility for the murders and criticizes Norman for trying to blame her, since she's helpless, like "one of his stuffed birds." She considers the policemen and detectives mulling around outside herself; "I know they're watching me", she crows. "Let them." Cut to a close up of a fly on Norman's hand. He looks down at it, and "Mother" states, "let them see what kind of person I am. I'm not even going to swat that fly." Then, Norman looks up into the camera and smiles in a medium close-up, while the image of his mother's skull briefly flashes across the his face. Cut to a chain dragging Marion's car out of the swamp.
While Hitchcock favors framing his characters in alternating one-shots throughout Psycho, which serves to emphasize their isolation, he keeps Norman and Sam in a two-shot during their final argument. By doing this, Hitchcock draws the viewer's attention to the fact that the two men are like mirror images of each other. Sam, a practical man, inspired a crime of passion in Marion. She never cared about money or about living a comfortable life; all she wanted was to be with the man she loved. However, Sam planted the idea in her head that money was the sole obstacle keeping them apart, thus inspiring Marion's theft and ultimately leading to her demise. (Ironically, Sam does write Marion a love letter agreeing to get married despite his financial troubles but at that point, she's already dead.) Similarly, as Dr. Richman points out later in the film, Norman didn't care about the $40,000 either - his murder of Marion was also a "crime of passion." Sam never even considered passion in his accusation of Norman, and Norman didn't know about the money when he killed Marion. Because of this, Norman is like a distorted version of Sam. Unlike Sam, who abides by society's rules, Norman is a man who acts on his own twisted impulses and does not, therefore, fit into his surroundings.
Hitchcock's decision to have Dr. Richman, an unfamiliar and clinical character, explain Norman's condition may have been influenced by the director's fear of censorship. The MPAA censors were very uncomfortable with Hitchcock using the word "transvestite", but Joseph Stefano argued for its inclusion on the grounds that "transvestite" is a clinical term. Dr. Richman makes it a point to correct the police officer who calls Norman a transvestite. He says, "a man who dresses in women's clothing in order to achieve a sexual change or satisfaction is a transvestite. But in Norman's case, he was simply doing everything possible to keep alive the illusion of his mother being alive." Richman's explanation here fulfills two purposes: he untangles the mystery of Norman Bates's complicated and twisted psyche, but he also serves as a disclaimer to those who might have found the darker themes in Hitchcock's film to be too risqué. Richman distances himself - and therefore, Hitchcock - from Norman's crimes, saying, "A psychiatrist doesn't lay the groundwork. He merely tries to explain it."
Although Marion does not appear in the second half of Psycho, the film's ending completes many narrative threads that Hitchcock introduces during Marion's flight from Phoenix. As Norman sits in his cell, his mother's voice echoes in his head; this recalls Marion's own descent into darkness. As she drove out of Phoenix, she heard the voices of those who would be coming after her after discovering the theft. In the throes of madness, Marion even smiled when she imagined the voice of the slimy Cassidy threatening her. Similarly, Norman smiles when Marion's car disappears into the swamp. Hitchcock uses these parallel moments to underline Norman's point that "we all go a little mad sometimes." Unfortunately for Marion, going mad once was enough. She believed that she would be able to re-emerge from the depths of her momentary insanity, but instead, she lost everything. Meanwhile, at the end of the film, Norman has found his truth, but that also means that he has lost his sense of self. He is an example of what it means to defy society and come out on the other side; now that Norman has completely transformed into his mother, he is finally - in a way - free. He no longer has anything to hide.
"Mrs. Bates's" final speech concludes the thematic thread of voyeurism that stretches throughout Psycho. "They're probably watching me now... well, let them," she says, which is reminiscent of Norman's reaction to Marion's suggestion that he send his mother to an asylum. "What do you know about caring?" Norman asks. "Have you ever seen the inside of one of those places? The laughing and the tears and the cruel eyes studying you...my mother there? But she's harmless! She's as harmless as one of those stuffed birds", he insists. Looking back, the viewer may scoff at the idea that Norman describes his mother as "harmless." However, it is important to remember that Hitchcock has implicated the audience in the crimes of both Norman and Marion. Just like the stuffed birds and Mrs. Bates, we, the viewers, don't do anything "but just sit here and stare." Hitchcock has slyly manipulated us into prodding his dual protagonists on, even enabling them to commit their crimes. The film's final shot of Norman, superimposed with his mother's rotting skull, drives this point home. Raymond Durgnat calls Psycho "a practical joke" because it "convicts all the spectators of Original Sin" (Kolker 98). If Mrs. Bates is guilty, then so are we.
The last shot of Psycho illustrates the theme of a dark truth hidden behind a superficial society; chains pull Marion's hastily purchased car (along with, presumably, the $40,000) out of the swamp. Despite the reveal, however, Hitchcock does not leave his viewer with any glimmer of hope. Yes, the mystery of Marion's disappearance has been solved, but Durgnat reminds us that "the reality to which Sam and Lila return is not a joyous one, but a drab shop of insecticides, pitchforks and - in addition - a vision of horror." Towards the end of the film, it seems though Sam and Lila might get together, but Hitchcock does not provide us with any such happy ending. Instead, everyone remains alone; "Mrs. Bates" has essentially killed off her son and taken his place - there is no longer any duality in the character of Norman. Marion is still dead. And we, the audience, are left to ponder our own individual darkness.