After arriving in Undead Settlement from High Wall of Lothric, light the Bonfire and head left. Pick up 1x Large Soul of a Deserted Corpse and head down to deal with two Dogs near the gate and then head to the other direction.
You will find another two Dogs behind the wagon and 1x Alluring Skull near a corpse. A little ahead, on the left side, there is 1x Homeward Bone. In this area of Dark Souls III Undead Settlement, you will find Yoel of Londor among the Undead – it is a good idea to hire him before proceeding to the next section of Undead Settlement.
Dark Souls 3 Walkthrough Guide – Undead Settlement
Use the lever on the left-hand-side of the gate to open it and find a Bonfire inside a hut on right side. From there, head towards the large house on left and deal with two enemies in the doorway.
Once inside, deal with the hanging corpse to acquire 1x Small Leather Shield. From there, head towards the balcony.
While walking around the house, drop other hanging corpses to obtain 1x Repair Powder. Head down to deal with two more enemies and find 1x Charcoal Resin Bundle before heading out of the building. On the other side, acquire 1x Loretta’s Bone near the corpse and proceed ahead!
Instead of jumping the gun and starting the fight, be smart and try to pick a couple of enemies before moving towards the next group. You can also toss a Black Firebomb at the explosive barrels to cause a massive explosion and kill multiple enemies at the same time.
Once done, acquire 1x Soul of an Unknown Traveler from near the gate of Undead Settlement and continue ahead!
After dealing with all weaker enemies, engage the fat lady. As with other battles, try to stay behind her and as soon as you see her reading a tome, land a deadly blow. Do not, by any means, let her grab you as it will deal massive damage. Once you are done with the fat lady of Undead Settlement, pick up 1x Estus Shard and 1x Ember before choosing one of the two paths to head towards the boss arena.