The sailors were trapped in their ship on the windless ocean for some time, and eventually became delirious with thirst. One day, the Ancient Mariner noticed something approaching from the West. As it moved closer, the sailors realized it was a ship, but no one could cry out because their throats were dry and their lips badly sunburned. The Ancient Mariner bit his own arm and sipped the blood so that he could wet his mouth enough to cry out: "A sail! A sail!" Mysteriously, the approaching ship managed to turn its course to them, even though there was still no wind. Suddenly, it crossed the path of the setting sun, and its masts made the sun look as though it was imprisoned, "As if through a dungeon-grate he peered." The Ancient Mariner's initial joy turned to dread as he noticed that the ship was approaching menacingly quickly, and had sails that looked like cobwebs. The ship came near enough for the Ancient Mariner to see who manned it: Death, embodied in a naked man, and The Night-mare Life-in-Death, embodied in a naked woman. The latter was eerily beautiful, with red lips, golden hair, and skin "as white as leprosy." Death and Life-in-Death were gambling with dice for the Ancient Mariner's soul, and Life-in-Death won. She whistled three times just as the last of the sun sank into the ocean; night fell in an instant, and the ghost ship sped away, though its crew's whispers could be heard long after it was out of sight. The crescent moon rose above the ship with "one bright star" just inside its bottom rim, and all at once, the sailors turned towards the Ancient Mariner and cursed him with their eyes. Then all two hundred of them dropped dead without a sound. The Ancient Mariner watched each sailor's soul zoom out of his body like the arrow he shot at the Albatross: "And every soul, it passed me by, / Like the whiz of my cross-bow!"
In Part 3, the poem becomes more fantastical as the spiritual world continues to punish the Ancient Mariner and his fellow sailors. Although later in the poem Coleridge reveals that a specific spirit is responsible for their demise, it seems as though the spiritual world as a whole is punishing the men, using the natural world as its weapon: the wind refuses to blow, the ocean churns with dreadful creatures, and the sun's relentless heat chars the men. The ghost ship, however, is separate from the natural world - it sails without wind, and its inhabitants are spirits. Death and Life-in-Death are allegorical figures who become frighteningly real for the sailors, especially the Ancient Mariner, whose soul Life-in-Death "wins", thereby dooming him to a fate worse than death. Even those sailors whose souls go to hell seem freer than the Ancient Mariner; while their souls fly unencumbered out of their bodies, he is destined to be trapped in his indefinitely - a living hell.
Life-in-Death, who takes on the form of an alluring naked woman, represents perpetual temptation. Because she wins the Ancient Mariner's soul, he is doomed to die only when he has paid his due...perhaps never. As we learn later, the Ancient Mariner is cursed to continually feel the agonizing compulsion to tell his tale to others; although telling the tale allows him temporary relief, he may never be free. First, he and the sailors are denied the satisfaction of drinking; now the Ancient Mariner will be denied the satisfaction of being able to die. His spirit is trapped in his own body, in an excruciating state of limbo - the realm of Life-in-Death. His "glittering eye" suggests more than madness; it is also a synecdoche representing his soul, which longs to be released from living death. It yearns to fly out of his body like the two hundred other sailors' souls did. In fact, when the sailors' souls are released, they fly past the Ancient Mariner with the same sound as the arrow he shot at the Albatross. Initially, the Ancient Mariner is relieved to have survived his shipmates, but in retrospect the sound tantalizes him, as it reminds him that his impulsive sin is the reason for his torture.
Part 3 introduces the theme of imprisonment. As we have said, the Ancient Mariner is doomed to be trapped in a state of deathlike life; his own immortal body is his prison. The ship itself is a prison for the sailors when there is no wind to carry it. Even before the ghost ship comes near enough for the Ancient Mariner to see its crew, it seems to imprison the very sun with its masts. This symbolizes Death and Life-in-Death's level of power; they have so much sway over the natural world and its inhabitants that they can jail the sun itself. The natural world seems to have this power, as well: the sailors are trapped in the "rime" by impenetrable ice until the Albatross sets them free. For this reason, many have interpreted the Albatross as Christ, and the Ancient Mariner as the archetypal sinner. The Albatross has the power to guide the sailors just as Christ has the ability to guide men's souls to heaven. By sinning on impulse, the Ancient Mariner ruins his chances at salvation, and is condemned to the eternal limbo of Life-in-Death. This interpretation implies that every time a person sins, he destroys his relationship with Christ and his chances of reaching heaven, and must redeem himself through acts of atonement. Just as people wear crucifixes around their necks to remind them of Christ's sacrifice and their responsibility to him, the sailors hang the Albatross around the Ancient Mariner's neck to remind him of his sin.