Madeleine walks towards the bell tower, but turns back to tell Scottie that things are not going according to plan. "It had to happen. We're in love, that's all that counts," Scottie says, holding her. She tells him that even if he loses her, he must know that she loved him, but he insists, "I won't lose you."
"Let me go into the church alone," she says, and goes inside. Suddenly, Scottie notices the tall bell tower and rushes after her, up the steps of the tower. As he climbs, he begins to experience vertigo. As he stops to catch his breath, he hears a scream, and we see Madeleine's body fall from the tower onto the roof below. He watches as nuns run to see what happened, before slowly making his way back down the steps and out the side door.
At a building on the premises later, a group of law professionals discuss the incident. A judge talks about the fact that Scottie was in charge of looking after Madeleine, even though Gavin Elster would have been well-advised to put Madeleine under medical care. "He could not have anticipated Mr. Ferguson's weakness—his fear of heights—would make him powerless when he was most needed." He discusses the fact that Scottie once had another person die under his supervision as a detective. He adds, "It is a pity that knowing her suicidal tendencies, he did not make a greater effort the second time." The judge then references the fact that Scottie left the premises after seeing Madeleine fall and went back to his apartment in a blackout, but says that this does not have any bearing on the jury's verdict. The jury delivers the verdict, that Madeleine committed suicide "while of unsound mind."
Gavin approaches Scottie and apologizes for the judge's treatment of him, before telling Scottie that he's leaving San Francisco, probably for Europe. "There's no way for them to understand. You and I know who killed Madeleine," Gavin says, before leaving.
That night, Scottie has a bizarre nightmare. First he sees the bouquet of flowers from the portrait, and the bouquet erupts in a cartoon burst. He then has a vision of Carlotta in the flesh, as the camera zooms in on her necklace. We see Scottie wandering towards an open grave. We see Scottie's disembodied head in the middle of a psychedelic colored display, as his body hurtles towards the roof of the mission, just like Madeleine. He wakes up, suddenly, overwhelmed with fear.
The scene shifts and we see Midge visiting Scottie at a mental hospital, where she plays him a Mozart record, which she tells him the music therapist said he ought to listen to. She implores Scottie to try and wake out of his stupor, saying, "Mother's here," but he just stares at her.
As Midge leaves the hospital, she asks to speak with the doctor, and asks how long it will take for Scottie to recover. "At least six months, possibly a year," the doctor says, adding that Scottie is suffering from acute melancholia and a guilt complex. Midge tells the doctor that Scottie was in love with Madeleine, and that he still is, before walking down the hall mournfully.
When he gets out, Scottie goes to Madeleine's old apartment, where he sees her old car. As a woman walks towards it, he approaches her and asks her where she got it. She tells him she bought it from Gavin Elster, and Scottie walks away abruptly. That night, he goes to the restaurant where he first saw Madeleine and sits at the bar. Suddenly, he sees a woman who looks exactly like Madeleine get up from a table and walk out, then orders a scotch and soda.
The next day, he goes to the museum and sees a woman looking at "Portrait of Carlotta," but it isn't Madeleine. He looks at a bouquet of flowers in a window display afterward and sees a woman with brown hair talking with her friends. She looks alarmingly like Madeleine, and he follows her to a tawdry hotel, called the Hotel Empire.
Scottie goes inside and finds the woman's room. When she opens the door, she looks exactly like Madeleine, but she has no idea who he is. She tells him to leave, but he insists on talking to her because she reminds him of someone. He questions her and she tells him her name is Judy Barton, she works at a department store, and she's from Salina, Kansas. Growing agitated, she pulls out her identification and shows it to him.
As Scottie stares at her, Judy guesses that the woman he's mistaken her for is dead. She shows him pictures of her father and mother, and tells him that her mother remarried a man she didn't like, so she moved to California. "I've been here 3 years, honest," she says, teasing him. As he goes to leave, Scottie asks Judy to go to dinner with him, and she agrees.
Suddenly, we see the scene of Madeleine's death once again, but this time we see her reach the top. Gavin is there, and he throws a body that is not Madeleine's off the ledge and covers Madeleine's mouth to prevent her from screaming. The scene shifts back to Judy, and we realize that she is indeed Madeleine, remembering this event. She pulls out a suitcase and looks at the suit that she was wearing on the day she pretended to commit suicide. She then sits down at the desk and writes a note to Scottie, revealing everything. "I was the tool, and you were the victim of Gavin Elster's plan to murder his wife," she writes.
She writes, "It was quite safe because she lived in the country and rarely came to town. He chose you to be the witness to the suicide. The Carlotta story was part real, part invented, to make you testify that Madeleine wanted to kill herself. He knew of your illness. He knew you'd never get up the stairs to the tower. He planned it so well, he made no mistakes. I made the mistake. I fell in love." She writes that she still loves him, then rips up the letter.
In this section of the film, Scottie makes explicit his love for Madeleine, feelings which she returns. As she rushes towards the bell tower, running away in a delusional haze, he insists, "We're in love, that's all that counts." Madeleine then tells him that even if he loses her, he must know that she loved him and she wanted to go on loving him. In spite of their relatively brief affair, Madeleine and Scottie express their passionate feelings towards one another in dramatic terms, as lilting string music underscores their confessions.
No sooner have the star-crossed lovers expressed their feelings to one another than Scottie does lose Madeleine, when she runs to the bell tower and throws herself off it. Yet again, Scottie finds himself unable to help someone due to his debilitating fear of heights. As he stands on the stairs up to the tower, catching his breath and trying to recover from his overwhelming vertigo, Madeleine manages to get just out of reach and kill herself. It is a re-traumatizing moment, a death for which Scottie can take responsibility, but perhaps it is also just the kind of trauma that can cure him of his vertigo.
Throughout the film, Hitchcock shoots sequences from surprising angles. For instance, as Scottie runs up the stairs after Madeleine, he begins to experience vertigo and looks down at all of the stairs he has climbed. The distance to the ground below extends out like a slinky, putting the viewer in the perspective of the heights-fearing detective. Then, when Scottie skulks out of the bell tower after Madeleine kills herself, we see the building from above. On one side, the nuns and priests are examining the dead body, while Scottie runs out the other side. At times, we see events from the very specific perspective of the characters, and at others, we are granted a bird's-eye view, an objective, almost God-like perspective.
After Madeleine dies, Scottie inherits her traumatizing nightmares. That night, when he returns home, he has a nightmare that seems to follow the same structure as Madeleine's dreams and delusions. He sees Carlotta in the flesh, and then an open grave, just as Madeleine described. At the end of the dream, he feels as though he is falling from the bell tower to the roof below, and wakes with a start. Hitchcock creates a haunting dreamscape, full of flashing colors, disembodied heads, and nonlinear time. James Stewart's wholesome, paternal face is often at the center of the frame, its expression contorted in horror, only adding to the suspense of these sequences. The horror of Vertigo is as much about seeing someone else's fear as it is about the viewer experiencing their own.
In this section we learn something that Scottie does not: Madeleine is still alive. Her doppelgänger, Judy Barton, actually is Madeleine, with a completely new appearance. As we learn from Judy's letter to Scottie, she was always an actress, participating in a plot to cover up Gavin Elster's murder of his actual wife. The person that fell from the tower was not Madeleine as Scottie knew her, but the real Madeleine Elster.