Warning: Spoilers ahead for IT: Welcome to Derry episode 5!

IT: Welcome to Derry finally sent in the clown.

The fifth episode of the prequel series, titled “29 Neibolt Street,” contained one of the most anticipated events in horror pop culture: the return of Bill Skarsgård as Pennywise the Dancing Clown.

The actor reprised his frightening role from It (2017) and It: Chapter Two (2019), a moment that has been awaited since the series premiered.

“We decided that, in this season, Pennywise should be a little bit like the shark in Jaws,” co-creator Barbara Muschietti told Entertainment Weekly in November 2025. “In both movies, it was very important for us to keep the mystery and the fear for this character alive. We find that familiarity is the enemy of that.”

“So it was important for us to delay the pleasure, or the terror, as much as we could,” she added.

The episode had Pennywise the clown’s grand entrance, but it also featured an unexpected an connection to Stephen King‘s Doctor Sleep.

Here’s everything to know about the ending of IT: Welcome to Derry, episode 5, explained.

Does Pennywise appear in IT: Welcome to Derry?

Yes, Pennywise the clown, played by Skarsgård, makes a disturbing appearance in episode 5 of IT: Welcome to Derry. The actor reprised the role he played in the two films, It and It: Chapter Two.

“We did ‘less is more’ for half the show, but then we did ‘more is more,’ ” co-creator Andy Muschietti explained to The Hollywood Reporter in October 2025. “The idea behind the delayed appearance is the build up of expectation.”

He continued, “The audience doesn’t know that they want it, but I think it creates a very special feeling. When and where the clown is going to appear was a game that I wanted to play with the audience.”

Is Matty still alive in IT: Welcome to Derry?

Matty Clements (Miles Ekhardt) was killed in the series premiere, but he returned in the fifth episode — or so his friends thought.

Matty reveals himself to Lilly Bainbridge (Clara Stack) and the other members of the Losers Club, telling them that he has been in the sewers beneath Derry. He claims that he was kept alive by the evil clown but was able to escape while the creature slept during the day.

Matty takes Lilly and the Losers Club kids down to the sewers, where it is revealed that Matty has been dead the whole time, and it was actually Pennywise in the form of Matty who lured the children into the sewers.

The twist of Matty being Pennywise was something originally conceived for the character Mike Hanlon (Isaiah Mustafa) in It: Chapter Two, as IT: Welcome to Derry executive producer and co-showrunner Jason Fuchs explained to Decider.

It wasn’t used in the movie, as they decided the idea strayed too far from the source material, but it eventually found a role in the TV prequel.

“Then when we started talking about the journey of the show, and specifically Episode 5,” Fuchs told the outlet in November 2025. “I remember us talking and going, ‘Wait, this is an idea that might actually have found its time and its moment.’ Matty as the guide, Matty in that context, makes a lot more sense.”

“Now we’re using pieces of the book, but then extrapolating and sort of inventing from there,” he continued. “So that was that moment was a long time coming, and it was very cool to see it real.”

Why doesn’t Pennywise kill Lilly in IT: Welcome to Derry?

After their encounter with Pennywise, the Losers Club runs from the monster, but Lilly gets separated from her friends. She comes face-to-face with Pennywise, who attempts to attack her, but suddenly stops when he sees a glowing dagger in the sewer water.

The mystical dagger is a piece of meteorite from when the mysterious evil creature crash-landed on Earth millions of years ago, as was explained in episode 4, per Decider.

In episode 5, Taniel (Joshua Odjick) is given the shard dagger by his Aunt Rose (Kimberly Rose Guerrero) to protect him when he takes the military men down to the sewers to confront the evil entity. Taniel drops the shard in the sewer, and it washes up by Lilly, who picks it up after Pennywise is frightened away.

What is in Hallorann’s lockbox in IT: Welcome to Derry?

In episode 5, Dick Hallorann (Chris Chalk) delves into his traumatic past, when his grandfather Andy (Andrew Moodie) breaks open his lockbox of negative psychic memories.

According to Decider, the box is something that was introduced in The Shining sequel Doctor Sleep.

“Imagine all of the things we hate about ourselves, or we hate about the people across us, and we just put it down,” actor Chalk explained to the publication. “We just stuff it, we stuff it. It’s really that.”

“All the terror that he has ever seen, he just slipped it in the box … So the moment you unleash that, it’s not going to come out as gently as Dick put it in and it’s not happy about being shoved in a box,” he continued. “These are not entities that want to be trapped. And so when they can break free, they do and it changes Dick forever.”

The episode ends with Dick seeing his deceased friend, Captain Pauly Russo (Rudy Mancuso), and then cutting back to the box, now open and glowing, on the bathroom floor.

Fuchs explained that there’s a reason Dick wanted to keep the box locked away.

“His life by the end of episode 5 has been fully upended in ways that will take him to the breaking point and possibly past in the episodes to come,” he teased.

Will Pennywise return in IT: Welcome to Derry?

According to Skarsgård’s IMDb, the actor will appear as Pennywise in the three remaining episodes of IT: Welcome to Derry‘s season.

“Expect a lot of Pennywise! Once Pennywise makes his debut,” Fuchs told TV Guide in November 2025, with co-showrunner Brad Caleb Kane adding, “He’s in! He’s another character.”