The Dedlocks are in their town house away from Chesney Wold. Presently, Lady Dedlock tells her personal handmaid Rosa of her plans to release Rosa from her duties and to put her in custody of Mr. Rouncewell, the father of the young man with whom Rosa is in love. Rosa objects to no avail. Subsequently, Lady Dedlock goes to consult with Sir Leicester Dedlock who is busy discussing business with Mr. Tulkinghorn. Nonetheless, when Lady Dedlock appears, Mr. Tulkinghorn moves away, and Sir Leicester accommodates Lady Dedlock.
Lady Dedlock tells Sir Leicester of her plan to release Rosa from her duties and to place her in the custody of Mr. Rouncewell. At first, Sir Leicester objects, but when Lady Dedlock argues that Rosa is too young and naive to appreciate the great privilege that she has been granted (of serving Lady Dedlock in Sir Leicester's household), Sir Leicester agrees that Lady Dedlock's course of action is the right thing to do. Presently, Mr. Rouncewell, the father of the young Mr. Rouncewell who is in love with Rosa, is brought by Mercury, the butler. Lady Dedlock questions Mr. Rouncewell whether he has yet persuaded his son to give up Rosa as he said he would in their previous meeting. When Mr. Rouncewell replies that he hasn't yet gotten around to it, Lady Dedlock, arguing that she is tired of the whole affair, urges Mr. Rouncewell to take Rosa into his custody. To that end Rosa, who is weeping, is presently brought before them. Apologizing for his tardiness, Mr. Rouncewell agrees to do as Lady Dedlock prescribes and to put Rosa in his care.
Lady Dedlock is having dinner alone when Mercury informs her that Mr. Tulkinghorn wishes to speak to her when she is done with her dinner. Lady Dedlock informs Mercury that she'll see him now. Presently, Mr. Tulkinghorn appears before Lady Dedlock to object to her course of action. He reminds her that they had come to a verbal agreement about how Lady Dedlock was to act as she had always done with no deviation from her previous mode of behaviour. He argues that her having dismissed Rosa goes against their agreement, and that she has now jeapordized Sir Leicester's reputation. Lady Dedlock argues that her action was done for Rosa's sake and to protect Rosa's reputation her--Lady Dedlock's--action was not only necessary but the right thing to have done under the circumstances. Lady Dedlock asks Mr. Tulkinghorn when he will disclose Lady Dedlock's true identity to Sir Leicester. Though he refuses to say exactly when, Mr. Tulkinghorn assures Lady Dedlock that the disclosure will be sooner rather than later.
Mr. Tulkinghorn returns home to his apartment. Meanwhile, Lady Dedlock informs Mercury that she will be taking some fresh air in the garden and that she might be a while (as upwards of an hour) on account of her headache. It is a very quiet night with the moon shining. Suddenly, the peace is disturbed by a loud report. People wonder what it was, but their curiousity subsides, i.e. until the next day when the dead body of Mr. Tulkinghorn is discovered in his apartment. He is dead, shot through the heart.