Act III opens in the barroom on the morning of Hope's birthday. Joe sullenly saw dusts the floor and slices loaves of bread; Rocky cleans the bar; Larry, Hugo, and Parritt sit at the tables.
Rocky complains that Hickey spent the entire night hopping bedrooms to spread his gospel. Larry defiantly insists that Hickey does not have his number; indeed, Hickey fears what he himself might ask him. Parritt attempts to ingratiate himself to Larry anew. Parritt increasingly fears Hickey. His suggestion that they are somehow mixed up with each other made him think that his mother has died from his betrayal, on the inside, he means. An undercurrent of satisfaction resonates in his pitying tone. Parritt swears once again that he never thought the cops would get her. He admits that he lied earlier about his patriotism; he ratted on the group for some money to blow on a whore. He offers his sordid confession in a tone that would somehow exonerate him from real guilt. Larry recoils.
A drowsy Rocky then asks Larry what Parritt would fear in his questions. Larry notes he has not explained Evelyn's death and it would not surprise him if she committed suicide. Parritt speaks up from his own preoccupation, insisting that "she," that is, his mother, would never kill herself. Before he can stop himself, Larry suggests that Parritt should take a jump off the fire escape. Parritt moves to another table broodingly.
Complaining of Hickey further, Rocky recounts how his two whores have stormed off to Coney Island as a result of their argument. Chuck enters in his Sunday's best; Cora wants a sherry flip for her nerves. They have continued to fight over his drinking and her past. When Rocky jeers at him, a fight almost breaks out. Chuck raises his fist, and Rocky reaches for his gun.
Joe attempts to break up the fight, and the two men immediately turn on him, saying, "Stay where yuh belong, yuh doity nigger!" cries Rocky. Joe springs forward with his knife in hand. Suddenly Larry laughs, urging the men to murder each other with Hickey's blessing. The trio's fury dies out, and each man sheepishly withdraws. A giggling Hugo wakes and complains that Hickey has accused him of wanting to be an aristocrat. He loves the proletariat: he wants to lead them, to become their God. Bewildered by his own confessions, he insists to Larry that he is drunk and does not know what he is saying. Larry concurs in pity. A brooding Joe then slams his key on the bar, breaks his glass, and defiantly announces that he is leaving the saloon to re-open his gambling house. He storms out.
A miserably, well-dressed Willie enters from the street. He refuses offers of a drink; today he plans to make it to the DA's office. Lewis and then Wetjoen enter. Both have put on a forced swagger despite their sick and feeble state. Each declares how they plan to get jobs today and begin readying for their returns home. As they maligning each other, their shameful histories come to light. Wetjoen has been disowned by his country for cowardly advising retreat during the war; Lewis has been disowned for gambling his regiment's money away while drunk. They lunge at each other viciously. Prevented from a scuffle, they both move to go but guiltily decide to bid farewell to Hope and Jimmy first.
A new permutation of the pipe dream emerges in the course of Parritt's second confession to Larry. The pipe dream here does not so much appear as political ideology or "tomorrow movement," as the fantasy of a better day to come, but as an evasion of guilt. As he moves through his pipe dream, Parritt appears subject to a number of delusions regarding to the motive of his crime: that he betrayed the Movement out of a sense of patriotism or for money to blow on a whore. What remains unacceptable to him is his hate for his politically pipe-dreaming mother, a hate clear from the outset that nevertheless torments his conscience and impels him to seek punishment from his most immediate father figure, Larry.
This hatred kept in abeyance is precisely what twins Parritt and Larry. As the audience already might suspect, Larry similarly harbors a secret hatred for his deluded wife Evelyn, a hatred he cannot admit to himself. Though in the final scene Hickey will suddenly disidentify from Parritt, claiming that he carries love where Parritt only holds hate, this attempt only makes their similarity clearer. Notably, as if sensing the analogous relationship between them, Parritt will thus begin to conflate Evelyn and his mother from the depths of his brooding. Almost madly will he rouse himself when the group speculates on Evelyn's fate: "she" could not have killed herself; "she" could not be dead; "she" still haunts him with her eyes.
Hickey's evasion of guilt is more elaborate than Parritt's, implicating his gospel of the peace in the dream destroyed. As he notes simply in the act previous, Evelyn's death has released her from a terrible husband; it is her freedom, just as his liberation from her pipe dream is his. As will become clear, Hickey's demystification of the pipe dream as "tomorrow movement" reveals itself as its own pipe dream, and is a means of evading guilt. As with the demystification of the tomorrow movement, the destruction of this pipe dream also forces a confrontation with the reality of the dreamer's desires, which in this case is the desire to kill. This demystification forces the dreamer into seeking a punishment that ends in his own death.
The remainder of this scene elaborates Hickey's "revolution." As we have seen, O'Neill play moves accordingly to a tightly wrought choreography involving various clusters of characters: Chuck and Cora, Rocky, Margie, and Pearl, all five of them, Joe, Chuck, and Rocky, Mosher and McGloin, and Wetjoen and Lewis. These characters uniformly move through the raising and demolishing of their pipe dreams. They come to blows when at their at their lowest, and they cling to each other desperately for support. Everything takes place in direct action, that is, action depicted on stage, and nuances of affect are spelled out in the stage notes. In appearing so unified, the action takes on an inexorable aspect. The audience already knows each character's imminent fall. As Hickey will remark later, that failure is to some extent the point of the action. Hickey and Parritt's terrible revelations progress according to a similar logic, the gradual accumulation of hints making their inevitable revelations proper no surprise at all.