Don Quixote recovers from his wounds. He is ready to take leave of his host and hostess, believing his life of luxury is at odds to his oath to chivalry. He is just about to ask for their leave when two women barge in on him at breakfast. The duke and duchess assume that the servants are playing another joke on him, and everyone is surprised to see Dona Rodriguez with her daughter.
She asks to speak with Don Quixote alone. The duke gives her permission, though he and his wife are surprised that such a dull-witted creature could come up with a prank.
The duenna is aware that Don Quixote is about to leave them. She asks him to help her daughter before he does by challenging the man who promised to marry her. She doubts the duke will help them. Don Quixote agrees.
The duke offers to seek the youth to spare Don Quixote the effort of having to track him down. He will see that the youth responds. Don Quixote throws down his glove. The duke accepts it so long as the duenna and her daugter agree to put themselves in Don Quixote's hands. They agree.
The duchess orders that the duenna and her daughter be given a room and waited upon, as they are to be considered strangers who came to ask for help. The other servants resent it.
The page returns from delivering the letters to Teresa Panza, and the duke and duchess are eager to read her reply and hear the page's account of what occurred.
Teresa’s letter to the duchess states that she liked her gifts. Everyone is pleased that Sancho is a governor, though none can believe it. She wouldn’t have believed it if not for the presents. Everyone thinks Sancho is a dolt and only fit to govern cattle.
Teresa wants to travel in a coach to make the people envious. Besides, her presence will make Sancho more known if she comes to court. She is sending the duchess the acorns she requested. She asks for the duchess to write, and she will answer.
They read Teresa’s letter to Sancho. Teresa expresses joy at his governorship, which is shared by Sanchica. She mentions the page with the letters and the presents. She still feels like it is a dream. She wishes to come to court and to ride in a coach. She tells him no one believes he is a governor. She wants some pearls.
She tells him the village gossip. One neighbor married her daughter to a painter. He was hired to paint the King’s arms, but he couldn’t’ do it. He decided to take up the spade. Pedro de Lobo’s son is becoming a priest. He is being sued for a breach of promise of marriage. There are no olives, so there is no vinegar. Soldiers came and took three wenches when they left. Sanchica is earning an income making bone lace, but Sancho should give her a dowry so she needn’t work. The fountain in the village has dried up.
The page gives his account of his trip.
Sancho's letter arrives for Don Quixote, and the duke and duchess also read that--and have doubts about his simplicity.