Grendel's mother senses that a human being has penetrated her lair. She catches him, but his body is protected by his chain-mail armor, which she can't tear.
Once Grendel's mother touches the bottom of the lake, she carries Beowulf to her "court" (1507). He doesn't have a chance to fight her with his sword.
Clusters of sea-monsters attack Beowulf, tearing his chain-mail.
Beowulf isn't impeded by the water, because the roof of Grendel's mother's lair protects him from the force of the current. (It seems like he might be in a pocket of air in an underwater cave, perhaps, although the poem is ambiguous on this point.)
Suddenly, Beowulf catches sight of Grendel's mother again, and swings his sword down onto her head with a blow of great force. Unfortunately, the sword fails to cut her.
Remembering his reputation, Beowulf throws his sword aside and fights Grendel's mother with his bare hands.
Beowulf and Grendel's mother wrestle and struggle together.
Beowulf spots a huge, heavy, ancient sword from the days of the giants. He swings it toward Grendel's mother in a wide arc, cutting deeply into her neck and killing her.
The lair becomes brighter after Grendel's mother dies, and Beowulf is able to inspect his surroundings. He finds Grendel's body and, to take further revenge, he decapitates the corpse.
Back on the surface, the Geat and Dane warriors are watching the surface of the lake, waiting for Beowulf's return or a sign of his fate. When Beowulf cuts off Grendel's head, the water heaves and surges, and they can see blood. They bow their heads and assume that Beowulf has been killed.
The Danes and King Hrothgar go home, but the Geat warriors stay where they are, waiting and wishing for Beowulf to return.
The giant sword that Beowulf found melts like an icicle. Apparently, the blood of Grendel is so poisonous that it destroys metal.
Beowulf sees enormous amounts of treasure in Grendel's mother's lair, but all he takes are the jewel-inlaid hilt of the melted sword and Grendel's severed head.
Beowulf swims back to the surface of the lake, where his warriors are overjoyed to see him.
The Geats return to Heorot Hall, taking Grendel's enormous severed head with them. The head is so large that they need four strong men to carry it.
Beowulf tells King Hrothgar all about his fight with Grendel, giving most of the credit to God for helping him.
Beowulf formally presents the jeweled sword hilt to Hrothgar. Hrothgar, examining it, notices that it is engraved with runes and pictures that tell the story of how war came into the world and how a flood that destroyed a race of giants—Scandinavian myths.
King Hrothgar praises Beowulf, describing him as "even-tempered, prudent, and resolute" (1705-6). He contrasts Beowulf with a bad king, Heremod, who was bloodthirsty and stingy.
Hrothgar uses the contrast between Beowulf and Heremod to illustrate the dangers of wealth and power, which can make men forget that they're all doomed to die and that God is really in charge. Hrothgar reminds Beowulf that he should focus on the afterlife and "eternal rewards" (1760), because he will die someday.
Hrothgar explains that he himself had gotten carried away by his power. He thought he had defeated all his enemies for good and ruled supreme in his land, but when Grendel came marauding he realized that he wasn't all-powerful.
Meanwhile, life is basically feasting, speeches, and battle for these guys, so, since the battle and speech are over for now, the Geats and Danes have another feast in Heorot Hall.
Everyone goes to bed and actually manages to get one unbroken night of sleep.
The Geats get up early, excited to start their return trip home.
Beowulf remembers to give the sword called Hrunting back to Unferth.