Lohmann believes Prof. Baum (Oscar Beregi Sr.) might have some connection to the case. He is brought to Lohmann's office and briefly slips up after realizing Kent is still alive. Lohmann and Kent go over to Baum's residence and attempt to open the door to his study, triggering Baum's warning not to be disturbed. Kent recognizes the voice of that of "Dr. Mabuse" and he and Lohmann force the door open, revealing a clever triggering setup with a prerecorded phonograph record. They find the late Mabuse's (Rudolf Klein-Rogge) instructions on a massive crime wave, and determine that Baum is going to set fire to a chemical plant.
By the time they get there, the fire is already a dangerous blaze, but the firefighters are able to move tanks of volatile liquids away before they ignite. Lohmann and Kent spot Baum overseeing the fire and they persue him, which leads to a thrilling car chase all the way to Baum's mental asylum. Baum, guided by the spectre of Mabuse, gets their ahead of the impeded heroes and makes his way to Hofmeister's (Karl Meixner) cell, where Baum, with a maniacal smile on his face, introduces himself as Mabuse. Hofmeister then freaks out and an off-camera fight ensues. Two orderlies enter the room to break up the struggle just as Kent and Lohmann arrive. Hofmeister, now in his right mind again, emerges from the cell, and the men look inside to see Baum, with the same distant expression as Mabuse in the previous film, tearing up Mabuse's instructions. Lohmann then leads Kent away, while the orderlies lock the mad Baum in Hofmeister's room.