Martin Scorsese's Shutter Island explores the psychology of humans and grief. This psychological thriller is written by Laeta Kalogridis, who adapted it from the namesake 2003 novel. After its premiere at the Berlinale Film Fest, the film was released by Paramount Pictures on February 19, 2010.
As per Letterboxd, the synopsis is:
World War II soldier-turned-U.S. Marshal Teddy Daniels investigates the disappearance of a patient from a hospital for the criminally insane, but his efforts are compromised by troubling visions and a mysterious doctor.
The film is mostly remembered for its shocking ending, which received its mention in most of the reviews. So, let's explore the meaning behind the ending.
What is the plot of Shutter Island?
Shutter Island revolves around Edward Daniels, aka Teddy (played by Leonardo DiCaprio), a Deputy U.S. Marshal. He is tasked to investigate the disappearance of a patient from the facility situated on the titular island. As things unfold, the viewers realize that Teddy might not be who he thinks he is.
How does Shutter Island end?

Towards the end of Shutter Island, we realize that Teddy is actually Andrew Laeddis, one of the patients of the facility. The investigation he was doing was a trick curated by his doctor, Dr. Cawley (played by Ben Kingsley), to help him get back to the real world. There have been multiple fan theories around the ending, suggesting that Laeddis is a real US Marshal who is tricked into believing by the doctors to be a patient so that the secrets of the island don't go out.
But the makers reveal a backstory of Laeddis, and the viewers are told that he had actually k*lled his wife. Chuck Aule, a close aide of Teddy, is actually Dr. Lester Sheehan, his chief psychiatrist. Both Sheehan and Cawley are trying to cure Laeddis with this game. However, other staff of the facility believe that he is beyond rehabilitation.
The entire game was to shed off Laeddi's Teddy persona and make him realize the bitter truth. His backstory involves his wife having k*lled their kids, and he avenged their death by k*lling her in response. She was not in a good state mentally, and Laeddis was aware of her condition but chose not to do anything about it.
After the exercise is revealed, Cawley tells Laeddis that this is his last chance before they decide to perform a lobotomy on him. Towards the end, Laeddis calls Sheehan Chuck. This proves that he has lapsed back, and he will be lobotomized later on. While some might see this scene as ambiguous, it's pretty clear that Laeddis is pretending to be Teddy so that the procedure will set him free from all the past guilt and pain. His final dialogue hints that he wants to die as the good man Teddy rather than live as Laeddis.
In 2019, Scorsese spoke to Quentin Tarantino for DGA, where he revealed that an interrogation scene has several hints of a twist ending. He said that during that scene, a woman can be seen with a glass, and in another moment, that glass is gone. This reveals the crux of the story that deals with what is real and what is imagination.
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