The Silver Hand is the third part of the Companions' quest line, available when you complete any one task after Proving Honor.
Skjor will want to talk to you during the nighttime at the underforge, located directly underneath the skyforge. When you attend, he and Aela will be present to perform the ceremony to become a werewolf. There is no requirement to become a werewolf, but you need to do so to advance the plotline of the companions.
After the ceremony, you'll be placed in Whiterun in werewolf form. You can either escape by going through the underforge, wait for the lycantrhopy to expire, or have your health bar depleted.
Lycanthropy[edit]
In Skyrim, Lycanthropy gives you a new power, "Beast Form". Once per day, the power allows you to transform into a werewolf, with a relativly strong melee attack, which can heal by feeding on humanoid corpses. You won't be able to interact with objects (other than doors), or use magic while in beast form, but you can use a roar to terrify low-level enemies. Beasst Form lasts for about 2.5 real-time minutes, extending by 30 seconds for each feeding. However, you should avoid towns when transformed, as the townsfolk will be hostile.
You will remain a lycanthrope until cured, either by completing the companions' quest line. While you are a lycanthrope, you will be immune to diseases, but will not receive bonuses for resting in beds. If you have Dawnguard installed, becoming a vampire lord will remove lycanthropy.
If you have Dawnguard installed, you can also obtain werewolf perks by feeding on corpses.
There are other features to augment your lycanthropy. The Ring of Hircane (received by speaking to the prisoner in Falkreath) allows unlimited transformations. The Dragonborn expansion has four rings for sale that also improve lycanthropy.
Gallows Rock[edit]
Once your first lycanthropic rampage is over, you will be transported near Gallows Rock. She will explain that the Silver Hand will be counter attacked, and they are stationed here. Skjor has scouted ahead, and you and her will attack their camp.
There are three members of the silver hand outside, who likely attack with arrows.
When you enter, you will first need to pull the chain to open the gate leading head. Proceed down the steps.
The first room has about three silver hand enemies. There is a chest in the room. Of the doors, the one on the left leads to a werewolf prison cell, and the right is barred until you clear the fort.
Past the doorway is a set of stairs leading up, and a skeever. There is a swinging wall trap at the top of the stairs, which you can use to harm two of the Silver Hand that detect your presence. One more silver hand is in the back corner, and and another will attack from the stairs. If you want, you can search the prison cells, although one of them has a hostile werewolf.
The next room has four more silver hands, attacking from both floors. The room past that has a single one in front of a fireplace.
In the final room, you will need to defeat Krev the Skinner. At low levels, he can still be terrified by your roar, and you can also use the charge power-attack to knock him down.
Once the last of the silver hands are dead, Aela will comment that they managed to kill Skjor. She will head back to the companions to plan the next action.