Charlie visits the Warren Home; he's feeling depressed. Mr. Winslow, the home's head psychiatrist, shows Charlie around the facility. Charlie is surprised that there isn't a fence around the compound, but Winslow that notes that it's generally not necessary. During the tour, they encounter a nurse named Thelma, who seems dedicated to her work and notes that it's rewarding because the patients really need the staff. They pass a building for emotionally disturbed patients, and Winslow comments that there isn't enough room for all of the patients. In fact there's a lengthy waiting list for incoming patients. As they pass through one of the shop areas, a young boy points out his work to the director and to Charlie. Charlie praises the young man's work because he knows that's what the boy needs, but his actions feel hollow to him. The principal at the Home's school comments that the patients are divided into two classes: tidy and untidy. When she comments that some of them are beyond help, Charlie retorts that science might one day help them. The principal agrees, noting that one must have hope. Back in the director's office, Winslow and Charlie discuss the Home's operations with the director. Winslow notes that plenty of people will give money, but it's tough to get people to give their time and affection. When he leaves, Charlie realizes that there was no talk of rehabilitation or even finding a cure for those in the home, merely a sense of waiting. He considers that he may soon be coming to the home.
Charlie has been putting off visiting his mother because he doesn't want to see her until he's sure what will become of him. Algernon is getting worse. The mouse has lost his desire to run the maze and Burt Selden has to force feed him. Charlie tries to maintain his relationship with Fay. She is still possessive of him, but he feels she has gotten bored with him. He also notes that his apartment has started to become like Fay's: messy.
Alice and Fay meet when Alice comes to visit Charlie. Charlie and Alice spend the evening talking, and Fay comes home drunk and enters Charlie's room via the fire escape. To Charlie's surprise, the two hit it off and the group talk into the morning. As Charlie gets a cab for Alice, Alice tells him that Fay loves him; Charlie denies it and professes his love to Alice. The two discuss Charlie's drinking and how Alice believes it is interrupting his work. Alice asks if Charlie has told Fay about the operation. Charlie informs her that he hasn't and comments that he believes the old Charlie comes between them because he's afraid of something. Alice asks if the old Charlie will ever let them be together, and Charlie replies that he isn't sure. Charlie returns to his apartment and makes love to Fay, but thinks of Alice.
Charlie sets up a cot at the lab because he is working there at a manic pace. This displeases Fay, but Charlie resents anything, or anyone, that gets in the way of his research. Alice attends to his needs while he works at the lab.
Charlie returns home for a short time and discovers that Fay has a new boyfriend; it doesn't seem to bother him. Charlie maintains his work with Algernon, and the mouse's behavior continues to be erratic. He remains committed to uncovering the cause of Algernon's regression, not for himself but to help others.
Charlie feels that he is on the edge of a breakthrough, but others are concerned that he is burning himself out. Charlie feels blocked in his thinking about the problem, so he decides to give his conscious mind a break by attending a party thrown by Mrs. Nemur for two members of the Welberg Foundation. Mrs. Nemur engages Charlie in a discussion about the project. Charlie has several drinks and begins act rudely, causing several guests to become uncomfortable and leave the party early. Professor Nemur confronts him, commenting that he has no right to act so rudely to people that he is indebted to for helping him. Charlie counters by suggesting that he owes none of them anything. When Nemur asks Charlie if he thinks he was better off before the operation, Charlie remarks that in some ways he was better off. Nemur sharply criticizes Charlie regarding his changed personality, and Charlie accuses Nemur of never treating him like a human being. A heated argument follows in which Charlie accuses men like Nemur of ignoring the human side of science. Because Charlie has had too much to drink, the old Charlie begins to come out and he nearly wets himself. He retreats to the washroom, and as he stares into the mirror, he feels that the old Charlie is somehow watching him again. He engages in a conversation with the old Charlie, telling him that he understands why he wants to regain his control but that he's not going to give up without a fight. Charlie leaves the party by himself.
On his walk home, Charlie realizes that Nemur's assessment of him as a self-centered, arrogant individual is correct. He is ashamed of what he has become. Standing alone in his apartment Charlie wonders what has happened to him. Early in the morning, Charlie believes that he has found the solution to the experiment's flaw and he rushes back to the lab to work it out.
Charlie writes a letter to Nemur in which he refers the professor to a completed report on his and Algernon's condition. He tells the professor that their experiment can be of no practical application because of its main flaw: the faster one becomes intelligent, the faster the regression occurs. He tells Nemur that he believes his own mental degeneration will be quite rapid. Charlie closes the letter by thanking those who have helped him and signs the letter "Charles Gordon."
Charlie tells himself not to panic. He notes that Alice cried and ran out when he told her of his prediction. In his journal Charlie emphasizes that no one is to blame for the problem. Nemur tells Charlie that his results have been confirmed, and Charlie suggests that no other humans should undergo the operation until the problem is corrected.
Charlie is becoming forgetful, and Algernon dies. Dissection shows that the mouse's brain has atrophied. Charlie buries Algernon in his backyard and admits to himself that he is frightened of what the future may hold.
Charlie decides to visit his mother, and notes that he must not hate her. When arrives, he is surprised by the deplorable conditions of his old neighborhood. He remembers it as being a neighborhood filled with life, particularly with children, but now it seems empty. When he nears the home, he sees his mother outside on the front step washing her windows. Seeing her slightly frightens him. He decides to pretend that he is lost. She asks if he wants anything, and Charlie is only able to respond with "Maaa." Rose recognizes him and asks why he has come. Charlie responds that he only wants to visit her, but Rose becomes frightened, enters the house and locks the door, and tells him to leave her alone. Charlie becomes angered by her response and bangs on the door so hard that he cracks the glass. His mother withdraws deeper into the building, into her own apartment, and Charlie forces open the front door, cutting his hand in the process. He pursues his mother to her apartment and tells her to open the door. He composes himself and tells her that he's not going to hurt her, that he simply wants to talk to her, insisting that he is normal now. He tells her about the operation, adding that he's smarter than all of them now-he is something she can be proud of. Rose is mesmerized. She sees his wounded hand and invites him in. As she tends to his wound, she slips into a state of shock, no longer recognizing Charlie and seeming very confused. She slowly regains some of her composure and asks Charlie how the transformation could be possible. When he retells her of the operation, she thanks God that her prayers were finally answered, but it's clear that her mind is somewhat unstable. She tells him that she'll rush out and tell everyone about the operation and his recovery. Charlie doesn't attempt to correct her, feeling that she has suffered enough, but he is happy that he has finally done something to make his mother happy. Before he leaves, he gives his mother a copy of his report, The Algernon-Gordon Effect.
Before Charlie can leave, Norma returns. Charlie doesn't want to see her, but he can't avoid it. Norma recognizes him and chastises him for not letting them know that he was coming. Norma tells Charlie that his mother is suffering from senility and that the doctor wants her to place Rose in a nursing home, but she hasn't the heart to do so. As Norma talks, it appears that she is genuinely glad to see Charlie. She notes that up until seven months ago she didn't even know he was alive. Years ago Rose had told her that he died in the Warren Home. She tells Charlie that it's fantastic to see him and that she wants to hear all about his life. This confuses Charlie, but he eventually understands that her reaction was inevitable. She had simply grown up. Charlie questions Norma about a specific, unpleasant memory, in which Norma hurt herself but blamed Charlie for the injury. At first Norma doesn't want to recall the event, but eventually she admits that she lied to her parents, telling them that Charlie hurt her. She adds that she's ashamed of the way she acted; the constant teasing and rejection from other children caused her to resent him. Charlie tells her not to blame herself. Norma asks Charlie why they sent him to the Warren Home, and suggests that perhaps she was responsible. Charlie tells her not to dwell on it, that the past is the past. Norma then tells Charlie how difficult her life has been, and that they need him to stay and help them. In that moment Charlie finally sees himself playing the part of a true big brother.
Charlie notices that Rose has been staring at them and that something inside her has changed. She points a kitchen knife at Charlie, her mind flashing back to the moment when she thought Charlie was about to do something inappropriate with his sister, the night she forced Matt to take him to the Warren Home. Norma screams for Rose to put the knife down and is able to get it from her. As Rose screams for Norma to get Charlie out of the house, she uses the word "sex," and now they all understand why he was sent away. Charlie doesn't recall ever acting in a sexual way toward his sister, but he can't be sure that the old Charlie didn't have such thoughts, buried deep inside, somewhere. Norma says she has a strong sense of deja vu, but Charlie doesn't have the heart to tell her that she probably saw the entire episode when she was a child.
Charlie leaves, telling his sister to take care of his mother. As he returns to the car, he cries. The children's rhyme "Three Blind Mice" runs through his mind again and again. He looks back at the house one last time and has a vision of the old Charlie, his face pressed up against a pane of window glass.
Charlie's comments to one of the staff at the Warren Home reveal that, even after all he has been through, he still believes science can help to solve man's problems. However, to Charlie the Warren Home is a sort of holding tank; it is not a place for rehabilitation or personal growth. Though one of the doctors speaks of having hope that some of the patients might one day be able to be cured, Charlie realizes that it is a very hollow sentiment. Charlie seems to accept the fact that he might again find himself a patient of the facility.
The fact that Charlie's apartment has become like Fay's, messy, does not indicate that he has loosened up; it marks the beginning of a more significant mental regression. When Charlie informs Alice that he has not told Fay about the operation, we understand that his relationship with Fay was one of need but not true love.
Charlie's behavior at Nemur's party reveals the sometimes cold and indifferent attitude scientists adopt toward science and their subjects. Charlie's reply to Nemur that perhaps he was better off prior to the experiment is a reflection of his first nurse's comment that perhaps the experiment shouldn't have been performed. And Charlie's conversation with the old Charlie leads us to believe that the old Charlie's personality is getting a better foothold on Charlie's consciousness.
Charlie's work on the Algernon-Gordon report demonstrates that his mind is still functioning at a high level. His signature, "Charles Gordon," on the letter to Nemur shows a conscious effort to distinguish himself from the old Charlie. His assertion that no one is to blame for his condition or the eventual decline he will experience is rather noble and suggests that perhaps he isn't as self-absorbed as so many have claimed.
Charlie's visit to his mother and sister reveals that a strong sense of forgiveness and compassion has developed in him. Charlie is neither angry nor bitter that his parents sent him away; he seems to realize that their actions toward him and their decision to send him to the Warren Home had as great an impact on them as it did on him. Finally, the revelation that Rose feared Charlie would harm his sister in a sexual manner explains Charlie's deep-seated problems with sex.