Peppercorn took care to do as the princesses had told him. He stole very quietly into the room where Yard-high-forehead-and-span-long-beard was lying, and when he was near the bed he sprang up suddenly and seized the sword. The moment the wounded giant saw his sabre in the hands of Peppercorn he jumped up quickly and ran out of the palace. Peppercorn followed him some time before he remembered what the two princesses had told him of the wonderful properties of the sword, but as soon as he recollected this he made a sharp cut with it in the air, as if he were cutting off a man's head, and the moment he did so Yard-high-forehead-and-span-long-beard fell down dead.

Then Peppercorn went back to the palace, and, taking with him the three princesses, prepared to return to the upper world.

When he came to the place where the rope was hanging he took a large basket, and, placing the eldest princess in it, fastened it to the rope, then, giving her a note, in which he said that he sent her for the Pike-man, he made the signal agreed opon for the rope to be drawn up. So his comrades pulled up the rope, and when it came down again with the empty basket, Peppercorn sent up the second princess, after giving her a paper, in which he had written, "This one is for the Mill-turner".

When the rope descended the third time he sent up the youngest princess, who was by far the most beautiful of the three. He gave her a paper which said that this one he meant to keep for himself. Just as the Pikeman and the Mill-turner began to pull up the rope the princess gave Peppercorn a little box, saying, "Open it when you have need of anything!"

Now, when the Pikeman and Mill-turner drew up the youngest princess, and saw how very beautiful she was, they determined to leave Peppercorn down in the pit, and go back without delay to the king's palace, and there see which of them could get the youngest princess for his wife.

Peppercorn waited patiently some time for the rope to be let down that he might be drawn up, but no rope appeared. At last he was obliged to own to himself that his two comrades had deceived and deserted him, and, seeing how useless it was to remain standing still any longer, he walked off without knowing where the road would take him. Walking on, after a long time, he came to the shore of a large lake, and heard a great noise of crying and shouting. Very soon a multitude of people, looking like a wedding party, made their appearance. After placing a young girl in bridal attire on the shore of the lake, the people left her there alone and went away.

Peppercorn, seeing the girl left by herself, and noticing how sad she looked, went up to her, and asked her why her friends had left her there, and why she was so sad? The girl answered, "In this lake is a dragon who, every year, swallows up a young girl. It is now my turn; and our people have brought me as a bride to the dragon, and left me to be swallowed up".

Peppercorn, on hearing this, asked her to let him rest near her a little, because he was very tired, but she answered, "You had far better fly away, my good knight; if it is necessary that I should die, it is not needful that you should die also".

But Peppercorn said to her, "Don't trouble yourself about me, only let me rest near you a little, for I am very tired. It will be time enough for me to run away when the dragon comes." Having said this he sat down near the girl, and in a little while fell asleep. He had not slept long before the surface of the lake became agitated, and the water rose up in large waves; presently the dragon lifted its head, and swam straight to the shore where the girl sat, evidently intending to swallow her at once. The maiden cried bitterly, and a tear falling on Peppercorn's face, awakened him. He sprang up quickly, grasped his sword, and, smiting fiercely, with one stroke, cut off the dragon's head.

Then he took the girl by the hand, and led her back to the city, where he found that she was the only daughter of the king of that country. The king was overjoyed at hearing that the dragon was killed, and also at seeing his daughter brought back to him safe and sound. So he insisted that Peppercorn should marry the princess, which he did, and they all lived together very happily for a long time.

After a while, however, Peppercorn began to long greatly for the other world, and grew sadder and sadder every day. When his wife noticed this change in his appearance she asked him very often what ailed him, but he would not tell her for a long time, because he did not wish to trouble her. At last, however, he could keep his secret no longer, and confessed to the princess how much he longed to go back to the upper world. Though she was very sorry to hear this, she promised him that she herself would beg the king to let him go, since he so greatly wished it. This she did; and when the king objected, not wishing to lose so good a son-in-law, the princess said, "Let him go; he has saved my life, and why should we keep him against his will? My three sons will still remain to comfort us!"

Then the king consented, saying, "Very well; let it be as he wishes, since you have nothing to say against it. Tell your benefactor to go to the lake-shore, and to say to the giant-bird he will find there, that the king sends her his greetings, and desires her to take the bearer of them up to the other world".

The princess returned to her husband and told him what her father had said, and then began to prepare some provisions for the journey. When these were ready, and the king had sent the letter for the bird, Peppercorn took a kind leave of his wife, and went down to the lake-shore, where he soon found the nest of the giant-bird and her little ones in it, though she herself was not there. So he sat down to wait under the tree where the nest was. As he sat there, he heard the little birds chirping very restlessly and anxiously. Then he saw that the lake was beginning to throw up high waves, and soon a monster came out of the water and made straight for the nest to swallow the young birds.