WARNING: Once you lose the Skeleton Key during this quest, it is irreversible. If you wish to keep this unbreakable lockpick, DO NOT COMPLETE this quest!
After completing Blindsighted, head to the mountains just west of Falkreath and locate the entrance to the Twilight Sepulcher which is near a mountain stream. Once inside, speak with the ghost waiting for you at the base of the steps. Explain that you have the Skeleton Key, and mention Karliah. Note: you can locate the journal mentioned during this conversation on the skeleton located to the East of this chamber. The journal will mention the five tests of the Pilgrim’s path.
“Shadows of their former selves, sentinels of the dark. They wander ever more and deal swift death to defilers.”
Enter the next room and fight your way through the ghosts mentioned as the first test in the optional journal that you may or may not have picked up.
Note: The next test can kill you very easily, saving your game is highly recommended before proceeding.
“Above all they stand, vigilance everlasting. Beholden to the murk yet contentious of the glow.”
As you enter the next room, you will notice your health starting to drop at an alarming rate. The trick to this test is to stay in the darkness. Light burns, but as long as you travel in the shadows you will make it through without much trouble.
“Offer what she desires most, but reject the material. For her greatest want is that which cannot be seen, felt or carried.”
After clearing test chamber two, continue onward until you find the statue of Nocturnal with a dead bandit at its feet. Use the pull each chain behind the torches to engulf Nocturnal in darkness and reveal a hidden door.
“Direct and yet indirect. The path to salvation a route cunning with fortune betraying the foolish.”
Travel through the hidden path until you encounter the swinging axes preventing your progress. Look to the left to see a door whose lock can be picked. You can use the Skeleton Key on this door to bypass all the traps. Continue forward until you reach an empty well. WARNING: This is your last chance to turn around and not complete this quest. Once you jump in, you will lose the Skeleton Key forever. Jump in. After a few moments the Skeleton Key will allow you to fall through the floor as if it knows that you sought escape.
“The journey is complete, the Empress’s embrace awaits the fallen. Hesitate not if you wish to gift her your eternal devotion.”
After the events of the next chamber plays out, you are allowed to choose one of three Nightingale Roles. Each of which gives you a special power that can only be used one per day.
Agent of Shadow: For two minutes you are invisible when sneaking. Attacking, opening doors, picking locks, etc. all make you visible but once you go back to sneaking, you will instantly become invisible again.
Agent of Subterfuge: Casts a fury spell that can frenzy any target regardless of level.
Agent of Strife: Casts a blast of energy that damages a target for 100 points and restores your health for 100 points.
You may now go back to the guild to complete any unresolved quests, but this concludes the main quest-line for the Thieves Guild.