The Black Goat supposedly resides within a hole deep down into the abandoned mines near Possum Springs. It is mentioned by the cloaked figures in the cult, who appear to worship it, that it does not speak but instead sings. The cloaked figures explain to Mae and the gang that Mae was one of the few to hear the Black Goat sing. The Black Goat is also believed to have given Mae her strange dream-like powers of clairvoyance and had given Eide his ability to walk through walls.
During their confrontation with the Cultists, Mae and her friends learn that after the mines' deposits were exhausted, many people in Possum Springs left the town seeking new jobs, causing the local economy to suffer. Two of the miners, Ed Shudder and his co-worker Jim were sent down to the mines to look for any stray minerals. In their search, Jim unwittingly stumbled down a deep, dark pit and, according to Ed, never hit the bottom. Ed tried calling for Jim down the pit, but instead of Jim answering, Ed heard the song of the Black Goat.
Ed learned that the Black Goat resided at the bottom of the pit, known as "The Hole At the End of Everything". It gave Ed a dark offering: it would keep the town alive and prosperous, but in return, Ed had to sacrifice people to the pit for the Black Goat to consume. Ed Shudder took this offer and left the cave.
Over the next few years, Ed Shudder slowly built up his Cult, exploiting the desperation of the ex-miners and other townsfolk, unsure of the town's future and losing faith in the local Church. According to some of the Cultists, Ed Shudder had a power they referred to as "The Glimmer", a sort of natural charisma granted to him by the Black Goat which he used to draw people to his side. The Cult worked in secret, snatching away folks that they believed wouldn't be missed to be sacrificed to the Black Goat, including Casey Hartley. At least three other people are offered to the Black Goat over the course of the game, but the Cult is known to have sacrificed at least 39 people overall.
Shortly after escaping Eide and the collapsing elevator, Mae falls down a hole in a cave flooded ankle-deep, where she quickly blacks out. She immediately wakes up floating in what appears to be deep space, hovering before a dark nebula with a pitch-black hole in the center, drawing in and swallowing stars. Mae speaks to an unseen entity- presumably the Black Goat- about how she feels, and how in the end she only wants to feel hopeful and for her life to have meaning again, even if it hurts at the end. The Black Goat then speaks directly to Mae for the first time, but instead of actual speech it talks only in cryptic, indecipherable glyphs. Mae remarks that she can't understand a word its saying.
After blacking out again, Mae finds herself standing on the opposite side of the flooded cave with her friends, who tell her that she "went all sleepwalk-y for a sec".
- The Black Goat may have been a reference to the cosmic deity Shub-Niggurath from H.P. Lovecraft's horror fiction. Shub-Niggurath is also known as “The Black Goat of the Woods with a Thousand Young”, and its worshippers also practice human sacrifice.