This was the second labour set by King Eurytheus and it was to kill the Lernaen Hydra.
Once Hercules reached the Lake of Lerna he covered his mouth and nose to protect himself from the poisonous fumes and fired flaming arrows into the Hydras lair. Once the Hydra had come out Hercules fought it and cut off one of it's heads. But to Hercules' dismay another two grew back in it's place. After seeing this he ran away and looked for help.
Hercules called for his nephew Lolaus for help. His nephew then came up with the idea of burning the stumps of the necks (once the had been cut of) to stop new ones growing back. When they put his plan into action they saw that it worked and had started to win the struggle. Seeing this Hera sent in a massive crab to distract them but with his nephews help, Hercules quickly killed the Crab and the Hydra.
Hercules dipped his arrows into the Hydras blood making them very poisonous.
But unfortunately King Eurystheus found out that his nephew helped him so he discounted it as on of the Ten Labours.