This is the latter part of act 3 scene 3 in which Hamlet comes across Claudius kneeling and appearing to pray. As Hamlet says "Now might I do it pat, now he is praying": it is the perfect opportunity to kill Claudius and take revenge for his father's murder. However, Hamlet chooses not to.
It is another example of Hamlet's traditional delaying. The reason he gives is that if he were to kill Claudius whilst he was praying, "I ... do this same villain send / To heaven" and he refuses to send Claudius to Heaven when Claudius murder of his father sent Hamlet senior to his death "grossly, full of bread; / With all his crimes broad blown" and therefore unable to reach Heaven.
The scene is replete with dramatic irony however: unbeknownst to Hamlet, Claudius has been unable to pray. Because his offence is "rank" and "smells to heaven" and "hath the primal eldest curse" upon it, being fratricide, recalling Cain and Abel, Claudius is unable to pray. Equally, he refuses to give up the benefits he has accrued from his crime: "My crown, mine own ambition and my queen" and therefore, whilst he may be able to mouth the words of a prayer he cannot pray properly: "Words without thoughts never to heaven go".
This scene is also hugely significant as it is the first time that the audience is given any objective indication (here a voluntary confession) that the murder is anything other than a fantasy of Hamlet's.