The turn comes with the death of Baldr. Baldr, the beloved and shining god, is protected by an oath sworn by all things not to harm him, all but the mistletoe, thought too young to swear. Loki learns this, and it is Loki who guides the blind god Hodr to throw a mistletoe dart that kills Baldr; when a chance arises to weep him out of the realm of the dead, Loki, disguised, refuses the tears, and Baldr stays dead. This is the moment Loki crosses from mischief into malice, and after it the gods hunt him down.
His punishment is one of the stark images of the mythology: Loki is bound with the entrails of his own son across three stones, with a serpent fixed to drip venom onto his face; his wife Sigyn holds a bowl to catch it, and when she turns to empty it and the venom falls, his writhing shakes the earth, the Norse explanation of earthquakes. There he lies until Ragnarok, when he breaks free to lead the enemies of the gods against them.
Modern retellings have softened Loki into a charming rogue. The medieval sources are darker and more ambivalent: an insider who becomes the agent of the end.