When a player reaches zero Health, they die, receiving a message on the screen saying ‘YOU DIED’ and being taken to the last bonfire they rested at. If the player has not rested at any bonfire, they are returned to the bonfire at Firelink Shrine, assuming the tutorial has been completed.
When a player dies, they lose all acquired souls and humanity. They also revert into Hollow form if they were human and will have to reverse hollowing again to use player related online features. However, they will not lose any kind of items or equipment except for the Ring of Sacrifice if it was equipped.
If a player dies via curse, not only will they lose humanity, souls, and their human form, but they will also respawn with their maximum health cut in half. See Curse for more details.
A victim of death will leave a bloodstain when they die. Bloodstains from other worlds can be interacted with to see how a player died. The player's own bloodstain is a means of regaining lost souls and humanity, and it can also be interacted with by players from other worlds. It is important to note that the bloodstain is usually left in a place a few moments back in time. Meaning, if a player falls off a cliff then clips another ledge before falling into a kill plane, the bloodstain will be near the location of where they originally fell from.
However, if a player does not retrieve their last bloodstain before they die a second time, a new bloodstain will replace the previous one, permanently losing the souls and humanity of the first bloodstain.
If a player dies as a friendly phantom, they will be sent back to the bonfire in whichever status they entered the hosts world in. Should they die as an invading phantom, then a bloodstain containing souls and liquid humanity will be left behind; however, unlike other types of death, human status is not lost. Note that this does not apply to Spirits of Vengeance.