Major spoilers ahead for It Chapter Two. The past has a way of repeating itself. The Losers Club of the It movies knows this firsthand. When they first meet Pennywise, they're a group of misfit kids running from their fears. And when he makes his reappearance 27 years later, they are fully grown and hellbent on ending his reign for good. But is Pennywise really dead after their final showdown in the caverns under Derry, Maine? According to It Chapter Two, the answer is yes (most likely).
In the epic last scene of It Chapter Two, the grownup Losers outsmart It and bring him down by using the very same tricks he's used on them. As the Losers taunt and belittle him, Pennywise (Bill Skarsgård) stumbles backwards, deflating in size until eventually he goes from a massive spider creature to a small, wrinkly clown whimpering on the side of a rock. In this moment of vulnerability, the Losers are able to rip out and crush It's heart.
In Stephen King’s thousand-page novel, the Losers Club succeed in killing It. The film follows that plot, though changing a lot of how it's done. Pennywise is only one manifestation of It, a physical form for his metaphysical existence in the Macroverse, an entirely separate dimension in the void between universes in King's novels. The clown audiences watched the Losers Club fight 27 years ago and now again as adults is his way of luring children, his prey of choice. Pennywise the Dancing Clown plays his tricks, but the evil being who dropped onto earth by way of meteor, feeds on fear, and controls the deadlights, is It’s actual, true form. In the book, It claims to be superior to anything we can find on Earth, which begs the question of whether or not a shapeshifting alien can even be killed.
First, in the movie, the Losers attempt to kill Pennywise with The Ritual of Chüd, which should have trapped It forever in an ancient artifact, according to Mike (Isaiah Mustafa). But it doesn't work, much to their dismay. Instead they are left to their own devices in a confusing cave where It is trying to separate them from one another and kill them all. The only way that they can defeat him is by working together.
They withstand every terrifying scenario, facing their fears to render Pennywise somewhat useless. Against all odds, the Losers find a way to make their childhood villain small, and this is what leads to his demise. The hold he has over Bill (James McAvoy), Beverly (Jessica Chastain), Eddie (James Ransone), Richie (Bill Hader), Mike (Isaiah Mustafa) and Ben (Jay Ryan) is rooted in fear. So when the group unites to confront him head-on, Pennywise is no longer the all-powerful, omnipresent force he once was.
While it is theoretically possible that It could regenerate himself into a new physical form, the book does not delve into that possibility. And it seems that even a possible third movie wouldn't take place chronologically after this one. But, speaking to io9, It and It Chapter Two director Andy Muschietti seemed keen to perhaps explore some of It's life-cycle, pre-Losers. "It has been on Earth for millions of years. He’s been in contact with humans for hundreds of years, every 27 years. So you can imagine the amount of material,” Muschietti said.
For now, it looks like Pennywise’s reign of terror is over. When the Losers Club finally escape It’s crumbling lair, they realize that the scars they earned as kids have disappeared, because they followed through on their promise to destroy It when he returned. The Losers beat Pennywise at his own game and only time will tell what happens now.