The Argives gather in front of the large cave from which the dead will soon be released (when soldiers roll aside the stone blocking its entrance). The Argives are terrified of the dead and recount their sins and how they will be punished for them. The Tutor points out that the wretched state to which superstition has brought these people proves his skeptical teachings to Orestes. Jupiter interrupts, saying that the Argives are better than The Tutor because at least they know that the gods despise them. Meanwhile, the crowd grows restless with anticipation as Aegistheus remains hidden in the palace. Orestes is tempted to interfere several times, but Jupiter holds him back.
Aegistheus appears and tells the crowd to wait and bear their suffering while he sends the guards in search of Electra. They return empty handed, and the king begins the ceremony without her. The stone is rolled away from the entrance to the cave and the High Priest calls on the dead to come out and torment the living. The Argives beg the dead for forgiveness as Aegistheus reminds them of their sins. Orestes is about to interfere when suddenly Electra appears dressed in white.
Aegistheus, the High Priest, and the Argives rebuke her for showing disrespect to the dead. Undaunted, Electra insists that her father would not want her to mourn but would prefer that she enjoy her life. She tells the Argives of cities in Greece like Corinth, which Orestes has described to her, where people enjoy their lives with no remorse. The crowd slowly begins to listen to Electra, realizing that the dead are doing nothing to stop her. They begin to think that the dead do not take pleasure in remorse and call on Aegistheus for an explanation.
Thrown off guard, Aegistheus has nothing to say in reply. He insists that Electra is speaking blasphemy and threatens to punish her. The crowd replies that this is not an explanation and begins to distrust the king. Electra dances around, laughing and saying that there are no ghosts in her way and that the Argives should not fear the dead, who would rather see them happy than guilt ridden. Realizing that the situation is turning against Aegistheus's repressive order, Jupiter causes the large stone to roll down from the cavern and crash into the adjacent temple.
The High Priest and Aegistheus instantly seize on this miracle, forcing the Argives to repent of their disbelief and insisting that the people work even harder at their repentance to appease the dead, who are angered by the people's lack of faith. The Argives blame their sin on Electra's temptation and threaten to rip her apart, but Aegistheus holds them back and banishes her from Argos instead. As the Argives depart, Jupiter insists that there is a moral in this: punishment has been properly dealt out to the wicked. Orestes turns on him sharply, reveals that Electra is his sister, and says he wishes to speak with her alone. Jupiter and the Tutor depart.
The Argives's fear and repentance is imposed on them from above by Aegistheus and the High Priest. Aegistheus does not rule through physical power. He rules entirely through the power of moral persuasion and fear. The annual day of the dead is intended to revive and strengthen the guilt of the people. By calling on several of them by name and recounting their sins, Aegistheus seeks to remind his subjects that all are guilty of something and that all must repent. He is supported in this by the High Priest, a symbol of religious order. It is not accidental that this notion—that all are guilty and all must repent of their sins—is also one of the principal tenets of Christianity. Sartre rejected organized religion on the grounds that it attempts to control human beings through a moral system that is presented as having a greater value than human freedom. More importantly, although the ideas of universal guilt and eternal repentance are imposed from above, the people themselves internalize them. Even before Aegistheus has appeared, the Argives rave about their guilt and the punishments they deserve. Even without the reminders of religious and political authorities, the people believe that they deserve to live in wretchedness and slavery. Order is maintained in Argos by convincing every Argive that he or she deserves to suffer.