The central, game-changing twist of Psycho is the revelation about the identity of the killer. Throughout the film, the audience, along with the characters, is led to believe that the murderer is Norma Bates, Norman's elderly, invalid, and violently jealous mother who lives in the house overlooking the motel. We hear her berating Norman and see her silhouette in the window.
The first major twist occurs when private investigator Arbogast goes into the house to question Mrs. Bates and is brutally stabbed to death by a figure who appears to be an old woman. The ultimate revelation, however, comes in the climax. When Lila Crane hides in the fruit cellar of the house to escape Norman, she discovers the 'mother' sitting in a chair facing away from her. When she turns the chair around, she finds not a living woman but the mummified, skeletal corpse of Mrs. Bates. In that moment, Norman bursts into the cellar wearing his mother's dress and a wig, brandishing a knife, but is subdued by Sam.
The film's final scenes provide a psychological explanation: Norman Bates's mother has been dead for ten years, having been murdered by a jealous Norman along with her lover. Wracked with guilt, Norman exhumed her corpse and began to preserve the illusion that she was still alive. This guilt caused his personality to fracture, creating an alternate persona of his mother. This 'Mother' personality is the murderer; whenever Norman feels a sexual attraction to another woman, 'Mother' takes over to eliminate the rival for her son's affection. By the end of the film, the psychiatrist explains that the dominant 'Mother' personality has completely subsumed Norman's own, effectively erasing him.