Walter arranges to secretly meet with Phyllis at Jerry's Market. In the grocery aisle below a "DOGS NOT ALLOWED" sign, she wears sunglasses for a disguise and they talk to each other with low-voiced dialogue. He describes to her how everything is falling apart - Keyes has figured it all out, has an expert witness, and is rejecting her accident claim. If she sues, facts about the first Mrs. Dietrichson death will definitely surface: "A lot of other things are gonna come up. Like, for instance, about you and the first Mrs. Dietrichson...The way she died. And about that black hat you were trying on - before you needed a black hat."

Walter admits to seeing Lola and listening to her "cock-eyed stories." Things are becoming strained between Neff and Phyllis. She looks at him sharply, registers suspicion of his meetings with Lola, confirms his guilty complicity in the murder of her husband, and vows that she is anxious to sue for the insurance claim:

Phyllis: She's putting on an act for you, crying all over your shoulder, that lying...
Walter: Keep her out of this. All I'm telling you is, we're not going to sue.
Phyllis: Because you don't want the money any more even if you could have it, because she's made you feel like a heel all of a sudden?
Walter: It isn't the money any more. It's our necks. We're pulling out. Do you understand?
Phyllis: Because of what Keyes can do? You're not fooling me, Walter. It's because of Lola. What you did to her father. You're afraid she might find out someday and you can't take it, can you?
Walter: I said, 'Leave her out of this.'
Phyllis: It's me I'm talking about. I don't want to be left out of it.
Walter: Stop saying that. It's just that it hasn't worked out as we wanted. We can't go through with it, that's all.
Phyllis: We have gone through with it, Walter. The tough part is all behind us. We just have to hold on now and not go soft inside. Stick close together the way we started out...I loved you, Walter, and I hated him. But I wasn't going to do anything about it. Not until I met you. You planned the whole thing. I only wanted him dead.
Walter: And I'm the one that fixed it so he was dead. Is that what you're telling me?
Phyllis: And nobody's pulling out. (Removing her sunglasses and looking at him with cold, hard eyes.) We went into this together and we're coming out at the end together. It's straight down the line for both of us. Remember?

Neff remembers what Keyes had said about the end of the line, death and cemeteries, to tie their fates together. He continues narrating into the dictaphone in his office, about imagining Phyllis dead:

Yes, I remembered. Just like I remembered what you had told me, Keyes. About that trolley car ride and how there was no getting off until the end of the line where the cemetery was. And then I got to thinking what cemeteries are for. They're to put dead people in. I guess that was the first time I ever thought about Phyllis that way. Dead, I mean. And how it would be if she were dead.

As his bond with Phyllis disintegrates and Keyes gets closer to solving the crime, Neff sees more and more (and thinks more) of stepdaughter Lola. Again, there's a two-shot of them walking in the hills. They are up behind the Hollywood Bowl (with the first movement of Schubert's Unfinished Symphony - No. 8 in B Minor, on the soundtrack), where Lola tells Walter (in two-shot again) that she is suspicious that an affair is being conducted between Phyllis and her ex-boyfriend Nino Zachetti. Lola believes they are partners in crime in the murder of her father: "They killed my father together. He and Phyllis. He helped her do it. I know he did." Realizing that her accusation would bring out the real truth, he cautions her, and then thinks to himself (in voice-over): "Phyllis and Zachetti. What was he doing up at her house? I couldn't figure that one out. I tried to make sense out of it and got nowhere."

The next day brings "the real brain-twister." After hours in the lobby of the Pacific Building, Keyes tells Walter that the Dietrichson case "just busted wide open...The guy showed, that's how...The guy who helped her do it." Neff wonders if Keyes is playing "cat-and-mouse" with him. Again, Walter provides a stick match for Keyes' cigar, learning why he never carries his own matches:

Don't like 'em. They always explode in my pocket.

Desperate to find out who "the somebody else" is, Walter stealthily goes to Keyes' office to search for the identity of the likely suspect. He plays back a dictaphone memo (an analysis of the claim) recorded by Keyes for Norton.

The two parts of Keyes' dictation confirm his own innocence, and reveal Phyllis' double-cross. Walter sits back on the desk, deeply moved that Keyes trusts him unconditionally: "I have known Neff intimately for eleven years and I personally vouch for him without reservation." The second part of the dictated memo proves that Keyes agrees with Lola's suspicions - he confirms the likely guilt of Zachetti as Phyllis' accomplice, his frequent visits to the Dietrichson home, and his unaccountable whereabouts on the night of the crime. The memo strongly advises that the whole matter be turned over to the office of the district attorney. Walter phones Phyllis and makes plans to meet her that night at 11 o'clock at her house - his desire to rid himself of Phyllis has become a real possibility.

Now that Walter has a scapegoat (Zachetti as a prime suspect for the Dietrichson murder), his own double-crossing nature surfaces. Resentful of Phyllis for double-crossing him, he dictates to Keyes that he has plans to "get clear of the whole mess" - and get off the trolley car.

The film's great final scene occurs in the darkened Dietrichson living room, shadowed by venetian blind slats. Just before Walter arrives, Phyllis (wearing silk pajamas) descends the stairs (but without a closeup of her anklet and legs), unlocks the front door, moves to a living room chair and lifts its cushion up, concealing a shiny, metallic gun (with pearl handle) in a chiffon scarf. She places the weapon under the chair she will sit in. She lights a cigarette and sits back on the couch to wait for Walter, whose dark shadow is first visible in the hallway when he enters the front door. His ghostly shadow pre-figures his actual entrance. Walter's intent is to kill Phyllis and thereby have Zachetti framed for both murders. When he reveals his deadly plan to Phyllis, what he considers his only option, she upstages him with 'plans of her own':

(Dictated to Keyes) For the first time, I saw a way to get clear of the whole mess I was in, and of Phyllis too, all at the same time. Yeah. That's what I thought. What I didn't know was that she had plans of her own.

Phyllis: (I'm) In here, Walter.
Walter: Hello, baby. Anybody else in the house?
Phyllis: Nobody, why?
Walter: What's that music? ['Tangerine' plays].
Phyllis: A radio up the street.
Walter: (He sits down on the arm of the sofa, close to her.) Just like the first time I came here, isn't it? We were talking about automobile insurance, only you were thinking about murder. And I was thinking about that anklet.
Phyllis: And what are you thinking about now?
Walter: I'm all through thinking, baby. I just came to say goodbye.
Phyllis: Goodbye? Where are you going?
Walter: You're the one that's going, baby, not me. I'm getting off the trolley car right at this corner.
Phyllis: Suppose you stop being fancy. Let's have it, whatever it is.
Walter: All right, I'll tell ya. A friend of mine's got a funny theory. He says when two people commit a murder, it's sorta like they're riding on a trolley car together, one can't get off without the other. They're stuck with each other. They have to go on riding together clear to the end of the line. And the last stop is the cemetery.
Phyllis: Maybe he's got something there.
Walter: You bet he has. Two people are gonna ride to the end of the line alright, only I'm not gonna be one of them. I've got another guy to finish my ride for me.
Phyllis: Just who are you talking about?
Walter: An acquaintance of yours. A 'Mr. Zachetti.' Come on, baby. I just got into this thing because I happen to know a little something about insurance, didn't I? I was a sucker. I would have been brushed off just as soon as you got your hands on the money.
Phyllis: Nobody wanted to brush you off.
Walter: Save it. I'm telling this. It's been you and that Zachetti guy all along, hasn't it?
Phyllis: That's not true.
Walter: Doesn't make any difference if it's true or not. The point is, Keyes believes Zachetti is the one he's been looking for. He'll have him in a gas chamber before he knows what's happened to him.
Phyllis: What's happening to me all this time?
Walter: Don't be silly, baby. What do you think's gonna happen to you? You helped him do the murder, didn't ya? That's what Keyes thinks, and what's good enough for Keyes is good enough for me.
Phyllis: Maybe it's not good enough for me, Walter. Maybe I don't go for the idea. Maybe I'd rather talk.
Walter: Sometimes people are where they can't talk. Under six feet of dirt maybe. And if it was you, they'd charge that up to Zachetti too, wouldn't they? Sure they would. And that's just what's gonna happen, baby. Cause he's coming here tonight in about 15 minutes - with the cops right behind him. It's all taken care of.
Phyllis: That would make everything lovely for you, wouldn't it?
Walter: Right. And it's got to be done before that suit of yours comes to trial and Lola gets a chance to sound off. Before they trip you up in the stand and you start to go under and drag me down with ya.
Phyllis: Maybe I had Zachetti here so they won't get a chance to trip me up so we can get the money and be together.
Walter: That's cute. Say it again.
Phyllis: He came here first, asked where Lola was. I made him come back. I was working on him. He's a crazy sort of guy. Quick-tempered. I kept hammering into him that she was with another man so he'd go into one of his jealous rages and then I'd tell him where she was. And you know what he would have done to her, don't you, Walter?
Walter: Yeah. And for once I believe you, because it's just rotten enough.
Phyllis: We're both rotten.
Walter: Only you're a little more rotten. You got me to take care of your husband for ya. And then you get Zachetti to take care of Lola, maybe take care of me too. Then somebody else would have come along to take care of Zachetti for ya. That's the way you operate, isn't it, baby?
Phyllis: Suppose it is. Is what you've got cooked up for tonight any better?
Walter: I don't like that music anymore. Mind if I close the window?

Phyllis admits how "rotten" she is - with a plan to persuade Lola's hot-headed boyfriend, Zachetti, to "take care of" (kill) Lola. The sound of the neighbor's blaring radio music is shut out when Neff closes the window. When the curtain is drawn, the room becomes black. A gunshot rings out, and Walter staggers at the window as he turns and is hit by the bullet in the shoulder. He stands there motionless for a moment and then reaches for his shoulder, daring her to finish the job with another shot, but she hesitates and is unable to kill him for some reason (because of her love for him, or because of her conscience?). She admits to being "rotten to the heart" after shooting him, but he doesn't "buy" her act:

Walter: You can do better than that, can't you, baby? You'd better try it again. Maybe if I came a little closer? (He takes steps toward her while she has her gun drawn on him and then he stops.) How's this? Think you can do it now? (She is incapable of firing a second shot and lowers her gun, trembling. Quietly, he takes the gun out of her unresistant hand.) Why didn't you shoot again, baby? (She puts her hands on him affectionately.) Don't tell me it's because you've been in love with me all this time.
Phyllis (her eyes filled with tears as she breaks down): No, I never loved you, Walter, not you or anybody else. I'm rotten to the heart. I used you just as you said. That's all you ever meant to me. Until a minute ago, when I couldn't fire that second shot. I never thought that could happen to me.
Walter: Sorry, baby, I'm not buying.
Phyllis: I'm not asking you to buy. Just hold me close. (She puts her arms around him in complete surrender with a genuine display of emotion. Then she draws slightly back in surprise and fear, realizing that it is her final moment when she senses the barrel of his gun against her chest.)
Walter (cold-heartedly): Good-bye baby.

Walter grimly shoots her twice at point-blank range - during their erotic embrace. Her head falls limp against his shoulder and then slumps in his arms. He lays her down carefully on the sofa, noticing the shiny anklet on her leg. Outside, Walter holds onto his limp left arm. After a few steps down the walk, he hears footsteps of someone approaching and quickly hides in the bushes. When Walter sees Zachetti coming up the steps, he has second thoughts about carrying out his frame-up of Zachetti. He calls out to him and convinces Zachetti that he must go to the corner drugstore, call Lola, and reconcile himself to her. In one of his final acts, Neff restores the status quo of their relationship:

Zachetti: She doesn't want any part of me.
Walter: I know who told you that, it's not true. Lola's in love with you. She always has been. Don't ask me why. I couldn't even guess.

The film returns to the present (4:30 am) in Neff's office, where he is recording his dying confession to Keyes. His final words into the dictaphone are a request for a fatherly favor:

I want you to be the one to tell Lola, kinda gently before it breaks wide open. And I want you to take care of her and that guy Zachetti...so he doesn't get pushed around too much.

Walter's dictation is interrupted when he turns his head, realizing that he is not alone in the room. An incredulous Keyes is in the doorway entrance into his office listening to his narration - he was tipped off by a janitor who saw Walter dripping blood on the way in. Walter, his face covered with sweat, admits his guilt:

Walter: I wanted to straighten you out on that Dietrichson case...Kind of a crazy story with a crazy twist to it - one you didn't quite figure out.
Keyes: You can't figure them all, Walter.
Walter: That's right. I guess you can't at that. Now I suppose I get the big speech, the one with all the two dollar words in it. Let's have it, Keyes.
Keyes: Walter, you're all washed up.
Walter: Thanks, Keyes. That was short anyway.

Keyes attempts to make a call for a doctor, but Walter doesn't want to be patched up so he can walk into the gas chamber at San Quentin on his own power. Instead, he suggests that Keyes go back to bed, and give him a four-hour getaway time so he can get across the border to Mexico (to return to the source of Phyllis' honeysuckle scent?):

Keyes: You'll never make the border.
Walter: That's what you think. Just watch me.
Keyes: You'll never even make the elevator.
Walter: So long, Keyes.

Walter staggers and then collapses as he makes a feeble attempt to get to the elevator lobby along the balcony of the mezzanine. He doesn't even have the strength to get up - visually trapped by the shadows and wrought-iron bars. Keyes is overheard calling for an ambulance, and then goes over and kneels next to Walter on the floor, where he is slumped against the door. Walter jokes about someone moving the elevator a couple of miles away.

The final confrontation is between the main protagonists, both polar opposites:

• the dogged guardian of society's rules/laws and representative of the insurance company - the institution that would be forced to pay for the Dietrichson murder if the case wasn't solved (Keyes)
• a man with an overpowering urge to challenge society's absolutist morality and risk being a criminal (Neff)

The two colleagues conclude their 'game' of concealment and detection:

Walter: You know why you couldn't figure this one, Keyes? I'll tell ya. 'Cause the guy you were looking for was too close, right across the desk from you.
Keyes: Closer than that, Walter.
Walter: (with his customary reply) I love you, too.

Walter struggles to light a crumpled cigarette he has pulled out of his pocket. Keyes identifies with the criminal he has just caught - perhaps one of the few times he sympathetically accepts the humanity of one of his victims - he assists Walter by ritualistically lighting his cigarette for him. [Throughout the entire film, Neff continually lit the cigars of the "matchless" Keyes. Now the thoughtful favor is finally reciprocated.]