In Norse mythology, the god Loki and the giantess Angrboða had three children, one of which was the Midgard Serpent (an enormous sea monster). The god Odin took these children and threw the Midgard Serpent into the sea that surrounds the world (Midgard). The serpent grew to surround the world, then held his own tail in his mouth so that he made a ring around the land. When he released his tail the Ragnarök would begin, a time of great battles and upheavals that would end with the rebirth of the world populated by humans instead of gods.
In Fuseli’s painting we are shown the heroic moment when Thor fishes the Midgard Serpent from the sea and is about to club it. The giant Hymir cowers in the corner while the god Odin watches from the clouds. Fuseli was an enthusiastic supporter of the French Revolution that had already begun when he painted this. We can liken the serpent to the ancien régime and the figure of Thor to the French people.