Psycho III is a 1986 American slasher film, and the third film in the Psycho franchise. It stars Anthony Perkins, who also directs the film, reprising the role of Norman Bates. It co-stars Diana Scarwid, Jeff Fahey, and Roberta Maxwell. The screenplay is written by Charles Edward Pogue. The original electronic music score is composed and performed by Carter Burwell in one of his earliest projects. Psycho III is unrelated to Robert Bloch's third Psycho novel, Psycho House, which was released in 1990.

The film takes place one month after the events of Psycho II where Norman Bates is still running the Bates Motel with the corpse of Emma Spool still sitting up in the house. A suicidal nun, with whom Norman falls in love, comes to the motel along with a drifter named Duane Duke. A reporter also tries to solve the mysterious disappearance of Mrs. Spool as someone begins another murder spree.

Released on July 2, 1986, Psycho III grossed $14.4 million at the U.S. box office on a budget of $8.4 million, becoming the lowest-grossing film in the series. It received mixed reviews from critics and was followed by a television prequel, Psycho IV: The Beginning.

In 1982, Norman Bates works at the Bates Motel and lives with the preserved corpse of Emma Spool, a waitress who told him she was his real mother after murdering several people. When Spool remains missing after a month, Norman's ex-boss, Ralph Statler, and local law enforcement grow concerned. Duane Duke, a sleazy musician desperate for money, is offered the job of assistant manager at the motel. Tracy Venable, a journalist from Los Angeles, is working on an article about serial killers being released from custody. Believing that Norman is killing again, Tracy appears at the diner, and attempts to talk with him. Norman opens up to her but is distracted when Maureen Coyle, a young, mentally unstable former nun, enters. Maureen resembles his former victim, Marion Crane, who Norman killed twenty-two years earlier which resulted in his incarceration. Seeing the initials "M.C." on her suitcase, Norman panics and leaves the diner.

"Mother" enters Maureen's bathroom that night, intending to kill her, only to find that she attempted suicide by cutting her wrists. The shock of this causes Norman to reassert his personality while a delirious Maureen mistakes "Mother" holding a knife for the Virgin Mary holding a crucifix. Norman brings Maureen to a hospital and offers that she stay as long as she needs to. After she is released, they begin a romantic relationship. That night, Duke picks up a girl named Red at a bar, but after Red makes it clear that she wants more than a fling, Duke rejects her. Red tries calling a cab, but "Mother" shatters the phone booth door and stabs Red to death. The following day, tourists arrive at the motel, planning to watch a football game. Tracy searches Spool's apartment, discovering the motel's phone number written on a magazine cover.

Patsy Boyle, the motel's only sober guest, is murdered by "Mother" on the toilet. Norman finds her body and buries her in the motel's ice chest. The next morning, Sheriff Hunt and Deputy Leo appear to investigate Patsy's disappearance. Tracy tells Maureen about Norman's past, causing Maureen to stay with Father Brian, who took care of her at the hospital. Norman discovers that Spool's corpse is gone, with a note in its place. Walking into Duke's cabin, Duke attempts to blackmail Norman by threatening to turn him in to the police. Norman attacks Duke with an ashtray, finally subduing him with Duke's guitar. Norman drags Duke and Patsy's corpses to his car to dump them into the swamp behind the motel. Duke, still alive, attacks Norman, causing him to lose control of the car and sending them into the swamp. Norman narrowly avoids drowning and swims ashore while Duke drowns.

Tracy talks to Statler about Spool and discovers she was working at the diner before Statler purchased it from Harvey Leach. Tracy meets with Leach, a resident at an assisted living facility, and is informed that Spool was also institutionalized for murder. Maureen convinces herself that Norman is her true love and returns to the motel. They share a tender moment at the top of the staircase when "Mother" shouts furiously at Norman, startling him. He loses his grip on Maureen's hands, causing her to fall down the stairs, killing her. Tracy enters the house and finds Maureen dead, then sees Norman dressed as "Mother" bearing a knife, but is unable to flee.

Tracy tries reasoning with Norman by explaining his family history. Spool was not Norman's mother; she was actually his mother's sister who was in love with Norman's father. When he chose her sister over her, Spool snapped and killed him. She then kidnapped the infant Norman, but was later institutionalized. Norman, in a rage, destroys Spool's corpse, severing Mother's control over him. Sheriff Hunt arrests Norman. Hunt tells Norman that he will probably be incarcerated for the rest of his life. Norman replies "But I'll be free, I'll finally be free". As Norman is driven off by the police, he caresses Spool's severed hand and smiles menacingly at the camera.

Carter Burwell was approached by Perkins to compose the score to the film, since Perkins had enjoyed Burwell's work on Blood Simple. Perkins stated that he wanted to take the score in a more contemporary direction than Jerry Goldsmith had for his more traditional score for Psycho II. Burwell flew to Los Angeles and recorded the score largely on a Synclavier electronic music station, augmented by women's and boys' choirs as well as percussion by Steve Forman.^[3]

After Universal suggested the film contain some pop songs so that the film could be marketable to the MTV generation, Burwell composed and performed songs with colleagues Stanton Miranda and Steve Bray. After Universal claimed the songs weren't sufficiently bankable, Burwell attempted to create a song with Oingo Boingo frontman and then burgeoning film composer Danny Elfman, using sampled strings from Bernard Herrmann's score to the original Psycho. This idea was also rejected.^[3]

Universal finally agreed to let Burwell take a motif from the score he'd composed and develop it into an instrumental electronic pop song. The song, "Scream of Love"—co-written by jazz saxophonist David Sanborn—was released as a 7" single and a series of dance remixes were commissioned from Arthur Baker and featured on the 12" version. MCA also commissioned a music video for the song featuring Burwell, Perkins and a "Hitchcockian woman". Perkins introduced the video on MTV as a guest VJ on July 2, 1986.^[3] The rest of the songs composed by Burwell, Miranda and Bray were used as background music in the film, playing from car stereos and jukeboxes.

Burwell's score was sampled by the hip hop group Insane Poetry on "Welcome to the Grim Side", the intro to their 1992 debut album Grim Reality, as well as on British musician Aim's 1999 electronica album, Cold Water Music.

When the film opened on July 2, 1986, it earned $3.2 million in its opening weekend and went on to gross $14.4 million at the domestic box office, becoming the lowest-grossing theatrical film of the Psycho series.^[4]