Suddenly Hickey explodes, insisting that he must tell his story. Though Hope and the others will attempt to silence him callously, insisting that they only want to pass out in peace, Hickey will continue his story unperturbed. Evelyn had loved him since childhood, marrying him even though he was known in their small town as a no-good tramp. A restless spirit, Hickey ultimately used a loan from a brothel madam to become a traveling salesman. Through all of his boozing and cheating, Evelyn stuck to her faith in him, accepting his promises of reform.
Evelyn's pipe dream made him feel like a skunk. Swearing that her pity and forgiveness was written on her face, Hickey moves to show her picture but remembers that he tore it up afterward. Parritt tells Larry that he burned Mother's picture, and explains that her eyes followed him constantly, wishing his death. Hickey continues, saying that on the night of Harry's party, he had promised he would not come to the saloon and get drunk. If he came, it would mean he no longer loved her. Thus, he devised his wife's escape and he murdered her in her sleep.
Moran and Lieb rise. A relieved Parritt makes his own confession and says that he betrayed Mother because he hated her. Oblivious to Parritt, Hickey recalls how he laughed after shooting her and heard himself speak to her corpse, "Well, you know what you can do with your pipe dream now, you damned bitch!" Hickey recoils in horror and thinks that he must be lying. He thinks that he could not have said that and he must have been insane. Hope seizes on the thought as an escape from the ruin of the group's pipe dreams. Moran's dismissal of Hickey's seeming attempt to plead insanity only strengthens his and the group's resolve. They only played along with Hickey to humor him. Hickey earnestly begs for the electric chair as the cops take him out. He wants to die as he does not have a pipe dream left.
With Hickey gone, Parritt begins begging Larry anew for peace. He too thought of vengeance in his treason. Hatefully, Larry commands him to his suicide. Parritt thanks him with simple gratitude.
Hope jubilantly starts the festivities at new. Hesitantly, the group comes to revive their pipe dreams. Pearl and Margie return and reconcile with Rocky. Throughout this second birthday party, Larry sits distantly at the window, listening apprehensively with his eyes shut in concentration. Initially Hugo presses him as to what is going on but ultimately leaves him in frightened anger.
A crunching thud is heard, and Larry hides his face in his hands; the crowd dismisses it. Larry wishes for death anew. Hope calls for a sing-a-long, and the group bursts into a cacophony of different songs. When it stops to laugh, Hugo drunkenly goes on with his "Dansons le Carmagnole!" They jeer at him, and he proclaims, "The days grow hot in Babylon!" The party joins him: "'Tis cool beneath the willow trees."
The play's denouement consists of two confessions and two death sentences: Hickey's and Parritt's. Hickey's confession, an attempt to assure himself of the truth of his peace, finally reveals his secret. Hickey hates his martyr-wife Evelyn and her pipe dream of his reformation. As the stage notes indicate, this revelation shocks him out of his nightmare. Incidentally, note how up to its very revelation is the reality of Hickey's hatred is set at a distance from him, and he hears himself condemn his wife to death rather than issue that condemnation directly. He then immediately pleads his insanity, allowing Hope and the others to revive their own delusions in the hopes that they will help him continue to evade his guilt. Disabused of the pipe dream of Evelyn's salvation, that is, the dream that allowed him to evade his guilt, he submits himself to the law and welcomes his death sentence. Note that Hickey calls the police himself and thus in some sense makes his speech to deliver himself to justice.
In his case, however, the law cannot offer the appropriate punishment. Here the law appears in the figure of two outsiders who cannot comprehend what has just come to pass. Thus they hear Hickey's pathetic pleas of insanity, pleas that would allow him to evade his guilty conscience, as an attempt to evade legal justice. Their emphasis on this form of justice underscores that the punishment they offer is for Hickey's crime against the law, his act of murder rather than that of his hatred.
Justice will be meted out for the crime of hatred in the case of Hickey's double, Parritt. Hickey's confession enables Parritt to make his own confession. He hated his pipe-dreaming mother, betraying her in an act of vengeance. He too has no pipe dream left and wants to die. This confession tears Larry from his grandstand. Unable to conceal his hate behind a pose of detachment, he sends him to the death others have jokingly suggested for himself throughout the play. It is not for nothing that this death involves a fall, since Parritt's suicide invites speculation on the other tropes of falling in the play, whether the fall from the pipe dream, or the fallen angel.
The last scene of the play divides the space as follows: the majority of the group return to their festivities, since Hickey's departure brings a sort of second birthday party, while Larry and Hugo sit at the window, the former waiting. The terrible suspense mounts. Hope jubilantly declares the crowd "cockeyed," and Larry shuts his eyes in eyes in concentration. Whereas the group has returned to their blind delusions, Larry divests himself of his Foolosopher eyes to bear witness to Parritt's demise.
The play then closes with the cacophony of songs that gives way to the chorus in unison, "The days grow hot in Babylon! 'Tis cool beneath the willow trees." Hugo has delivered this refrain throughout the play and it is in some way emblematic of the pipe dream. Thus, this final vocal arrangement grimly dramatizes the organizing principle of the play. The characters' myriad tales find voice in the leitmotif of the pipe dream. The invocation of Babylon also recalls Larry's comment at Hope's birthday party on the feast of Belshazzar. Despite the festivities, the writing Hickey has left on the wall remains, condemning the group to ruin.