Thieves' Passage is a hidden underground passage that leads out of Bavelock to just outside the walls of the city. You are forced to walk through the passage near the ending of the main story of the game.
The only entrance to it - from within Bavelock - is inside a house in the northeast corner of the city. Guarding the passage is Agga, a ghost who asks you a riddle. Answer correctly ('Light') and you climb down a ladder to enter.
Inside you encounter some friendly thieves, among them Jade who will buy items off you on the black market. But you also meet two hostile Bandits (Medruo and Levus) blocking the way further in the passage. Throughout the rest of the Thieves' Passage you encounter the undead Ghouls and Spitters.
Throughout the passage you meet closed gates that you must open with the corresponding lever.