Orestes attempts to convince Electra to leave Argos because her life is in danger. She refuses, blaming her failure on Orestes. Before she met him, she had dreamed only of revenge, but he had made her believe that there is more to life and that she could save the Argives from their remorse. She will not leave Argos because it is her destiny to stay there. She must wait for her brother to arrive. His destiny is to join her in carrying out his revenge, and she must remain in Argos to guide him. She says that Orestes has made her forget her true destiny for a moment, but she has remembered her mission now and must carry it out. As Jupiter creeps onstage to eavesdrop on the conversation, Orestes reveals his true identity to his sister.
Electra is shocked, telling Orestes that he must leave because she has no use for him. He is too innocent. She needs a brother who will join her in her revenge. Orestes refuses to leave. It is bad enough that he does not belong to his city of birth and to its people, but he cannot handle being refused by his own sister. Orestes decides that he must stay in Argos and make the city his own. Electra protests that the city will never accept him, and Orestes searches desperately for a way that he can remain in the city.
Orestes calls upon Zeus for moral guidance. He asks for a sign that will tell him whether he really should leave like a coward. Jupiter, listening to the request, causes light to flash around the stone. Electra tells Orestes that he has his sign from god and he should follow it and leave. Seeing the sign, however, Orestes realizes that he is free to disobey the orders of the gods. The gods require that he live in peace without intervening in others' affairs, but Orestes understands that this peace is a request imposed on him from above and decides to disobey it. He feels his past falling away from him and sees that his decision is grounded only in the present. Orestes realizes that the only way to become a true citizen of this city of remorse is to commit a crime that will free the Argives from their remorse. When Electra asks whether he plans to atone for the whole city, Orestes replies that he intends no such thing; he wishes merely to take up the Argives's guilt.
Orestes's eyes lose their bright innocence and darken. He insists that he will rip the city apart so he can wedge himself into it. He decides that the only way to belong, to call Argos his city and to call Electra his sister is to take them by force. When Electra asks how he plans to free the people, Orestes replies that it is only the king and queen who hold the people in the slavery of remorse. To free them of it, he needs only to kill those responsible. Electra suddenly realizes that the man before her is the Orestes she has been dreaming about. The siblings plan their revenge.
This is by far the most important, and the most philosophically dense, section of the play. The action up to now has been building towards Orestes's recognition of his freedom. Both he and his sister are at a turning point in their lives. Three details point to the centrality of this section. First, the section concludes the first half of the play, making it the play's structural center. Second, both Orestes and Electra lose their innocence here, he by recognizing his freedom and she by realizing that finally her lifelong fantasies will be fulfilled. Third, it is here that Electra finally calls Orestes by his name. Naturally she could not call him Orestes earlier since she did not know who he was. Even after he has revealed his identity, however, Electra continues to call him Philebus until the conclusion of the section, when suddenly she recognizes that he has left his youthful innocence behind. The structural location of the section, the central characters' loss of innocence expressed in their dialogue, and the name change from Philebus to Orestes are signs pointing to the importance of this section as the major turning point of the play.
Electra is developed further as a contrast to Orestes. Her inability to accept her freedom is evident from her refusal to take responsibility for her actions, her insistence on destiny and revenge as the only worthwhile motives for action, and her unwillingness to act on those motives. Having just attempted unsuccessfully to free the Argives from their remorse, Electra suggests that she was wrong to try. Her life is dominated by her belief in her destiny and her desire to avenge her father's murder. In order for her actions to be free, Electra had to act based on motivations other than these. A free action aims at shaping the future, but destiny and revenge only ground one in the past. Since Orestes is the only character in the play to fully recognize and accept his freedom, he must reject past events as a reason for acting and take the future as his motive: this future for him involves freeing the Argives and taking his place as one of them. Electra had a brief glimpse of freedom when she attempted to free the Argives, but she shies away from it. Instead, she insists that she must act based on her destiny and the desire for vengeance. Seeing freedom in Orestes's eyes, Electra attempted to take it but lost her nerve and returned to her original belief in revenge. She calls her destiny her "one and only treasure," which she had almost lost thanks to Orestes.