Sissy and Rachael have gone to the country to spend some quiet time, and as they are walking around, Rachael, to her horror, spots Stephen's hat lying abandoned on the ground. A few more steps forward, and Sissy nearly falls into a huge yawning chasm in the earth. Fearing that Stephen has fallen into the chasm, Rachael almost becomes hysterical, but Sissy, shaken herself, manages to calm her down and the two go look for help to try and rescue Stephen, if he's down there.
Rachel is initially overcome by her feelings, a tendency that was considered stereotypically feminine during the Victorian era (when the novel takes place). This could be seen as a weakness, but those same feelings of the heart give Rachel and Sissy strength to persevere for the sake of those they love.
They return to the chasm—which is called Old Hell Shaft—with workmen and a doctor. After four hours, the men manage to rig a kind of elevator and manage to rescue Stephen from the bottom of the pit, though he is barely alive. It is now night. Stephen recovers consciousness, though he is unable to move, and speaks to a tearful Rachael. He tells her that all of the workers have fallen into a pit, just as he fell into this pit, and says that he only survived his fall because from the bottom of it he could see a star on which he prayed for peace and forgiveness between workers and factory owners. He confirms that he had been on his way back to clear his name when he fell into the shaft.
Stephen would not have died had he not been expelled from Coketown by selfish, heartless Mr. Bounderby, had he not been unjustly framed by the real culprit of the Bank robbery, and had he not been shunned by the union. His tragic death is, by extension, a consequence of the industrial system and its corrupt factory owners, the actions of a young man educated only by facts, and the workers who themselves are corrupted by industrialization. Yet Stephen's words to Rachael indicate a way out: forgiveness, which is the central tenet of Christianity. The novel, through Stephen, is suggesting that industrialization has stolen true Christian faith from both owners and workers, and that only by reclaiming the core Christian attributes can the corrupting influence of industrialization be tempered or cured.
He then calls Louisa to his side, who has also come along with Tom, Gradgrind, and many others, and tells her to bring Mr. Gradgrind to him, which she does with dread. The dying man asks Mr. Gradgrind to clear his good name; he says that he will not name specifics, but he tells Mr. Gradgrind that he once met with Tom, and Tom will tell him how to clear Stephen's name. Stephen then dies peacefully under the stars, holding Rachael's hand.
At last the truth comes out, and Gradgrind must begin to face that not only did his "education of facts" make his daughter miserable, it also turned his son into a criminal. Stephen's life was difficult, but his death—with a cleared name and in the arms of his beloved—is peaceful. It is also worth noting that Stephen's pose in death is analogous to Jesus, dying in the arms of Mary.