After a day of work, the men return to the bunkhouse. Slim, whose dog had a new litter of puppies, gives Lennie one of them. George admits to Slim that he and Lennie escaped lynching when Lennie was accused of rape. Carlson complains about Candy's dog, a decrepit and stinking creature. He offers to shoot the dog, and after repeated complaints, Candy relents, despite his obvious wish to keep the dog. George complains about "tarts" such as Curley's Wife, and when the other men suggest that they visit a whorehouse the next night, George says that he prefers the company of whores, since with them there is no chance of danger. When George again tells Lennie the story about the house that they will have, Candy overhears. Candy offers to pool his money with theirs if they'd let him work on their farm. A bit later, Curley searches for his wife once more; he attacks Lennie when he suspects that Lennie is laughing at him. Curley punches Lennie several times, but Lennie does not fight back until George gives him permission, at which point Lennie crushes Curley's hand.
While the other men are at the whorehouse, Lennie visits Crooks, the black stable buck. Crooks is rude and contemptuous toward Lennie until he realizes that Lennie has no ill intent. Candy also visits the two men, for they are the only ones left at the ranch while they others are in town. They discuss the plan for a small farm and Crooks shows some interest in joining them. Curley's wife sees the three men and seeks their company out of loneliness; when Crooks tells her that she is not supposed to be in his room, she upbraids them as useless cripples and even threatens Crooks with lynching.
The next morning, Lennie accidentally kills his new puppy when he bounces it too hard. Curley's wife finds him in the barn with the dead puppy. She pities him and allows him to feel how soft her hair is. When he handles her too forcefully, she screams. Lennie covers her mouth and accidentally snaps her neck. After this killing, Lennie flees from the ranch. Candy and George find the body and infer Lennie's guilt. Candy alerts the other men, and Curley forms a party to search for Lennie and kill him. In the interim, George steals Carlson's gun, leading the other men to think that Lennie took it before he escaped.
George, who points Curley and the other men in the wrong direction, finds Lennie in the brush where he told him to return at the beginning of the novel. Lennie has been having hallucinations of a giant rabbit and his Aunt Clara; they warn Lennie that George will be angry at him for killing Curley's wife and that he has lost the possibility of having a house with a rabbit hutch. George reassures Lennie that they will have the rabbit hutch after all, meanwhile preparing to shoot his friend with Carlson's gun. Upon hearing the shot, the other men find George and Lennie. George tells them that Lennie had stolen the gun and that he shot Lennie after the gun got loose in a struggle.