For a while, Curley's wife and Lennie were talking about how George would control Lennie, and how open-minded Curley's wife is because her people wouldn't let her really venture out on her own.
Lennie went into the barn with a deceased puppy in his arms. He was upset that he died & he was worried that George wouldn't let him tend rabbits.
Curley's wife started to get comfortable with Lennie, so she suggested that he touch her hair. Curley's wife didn't realize how carried away Lennie would get while touching her soft hair. She was yelling for him to stop, but his grip became deadly and unfortunately snapped her neck.
Lennie was worried that George would find the dead puppy, so he decided to try to hide him in the straw instead.
While Lennie was sulking alone, Curley's wife walked in to see what Lennie was up to by himself.