The next night, after celebrating Grendel's death, Hroðgar and his men sleep in Heorot. Grendel's mother appears and attacks the hall. She kills Hroðgar's most trusted warrior, Æschere, in revenge for Grendel's death.

Hroðgar, Beowulf, and their men track Grendel's mother to her lair under a lake. Beowulf prepares himself for battle; he is presented with a sword, Haunting, by a warrior called Unferth. After stipulating a number of conditions to Hroðgar in case of his death (including the taking in of his kinsmen and the inheritance by Unferth of Beowulf's estate), Beowulf dives into the lake. He is swiftly detected and attacked by Grendel's mother. However, she is unable to harm Beowulf through his armour and drags him to the bottom of the lake. In a cavern containing Grendel's body and the remains of men that the two have killed, Grendel's mother and Beowulf engage in fierce combat.

At first, Grendel's mother appears to prevail. Beowulf, finding that Hrunting cannot harm his foe, discards it in fury. Beowulf is again saved from his opponent's attack by his armour and, grasping a mighty sword of the giants from Grendel's mother's armoury (which no other man could have hefted in battle), Beowulf beheads her. Traveling further into the lair, Beowulf discovers Grendel's corpse and severs his head. Beowulf then returns to the surface and to his men at the "ninth hour” He returns to Heorot, where Hroðgar gives Beowulf many gifts, including the sword Nægling, his family's heirloom.