Diana, now locally famous for her fashion sense, helps Anne dress for a performance at the upscale White Sands Hotel. Diana suggests a dress of white organdy for Anne’s slim figure; Anne can adorn the dress with the string of pearls Matthew recently gave her as a gift. Anne, accustomed to public speaking, is levelheaded about the affair until she enters the hotel dressing room by herself and is swallowed up in the bustle of elegantly dressed city women. Suddenly, she feels out of place in her simple dress and pearls, which looked lovely in her room at Green Gables but now seem plain next to the other ladies’ silks, laces, and diamonds. Onstage, Anne sits between a stout lady who occasionally turns to scrutinize her and a girl in white lace who laughs loudly about the country bumpkins at the affair. The show of wealth and culture intimidates Anne, and stage fright assails her. For several moments, she feels she must run off the stage. Then she sees Gilbert’s face in the audience, and the unbearable thought of failing in front of him spurs her on. She delivers a recitation so accomplished that it impresses even the girl in white lace. Afterward, the stout lady, who is the wife of an American millionaire, introduces her to everybody, and she receives many compliments.

On the ride home, Diana tells Anne she overheard a rich American man comment on Anne’s hair and face, saying he wanted to paint her. Later, in response to Jane Andrews’s wistful observations about all the jewels and riches that were on display, Anne says that she already feels rich in her own skin, with her imagination and the gift of Matthew’s string of pearls.

Anne’s departure for Queen’s Academy is imminent, and everyone at Green Gables helps with the preparations. Marilla changes her ideas about fashion and buys Anne fabric for a fancy evening dress. When Anne tries the dress on and recites a poem for Matthew and Marilla, Marilla begins to cry. At first proud that her poem has moved Marilla, Anne realizes her departure is what makes Marilla sad and reassures her that though she has grown up, she is still the same person, saying, “It won’t make a bit of difference where I go or how much I change outwardly; at heart I will always be your little Anne.” They embrace, and Matthew reflects that it was Providence (God’s will), not luck, that sent Anne to them in the first place.

On the first day at Queen’s Academy, Gilbert’s presence in the advanced class comforts Anne. Although Anne and Gilbert never speak to each other, his presence reminds her of the rivalry that has motivated her for so many years. Anne is lonely in the classroom full of unfamiliar people and miserable later that night in her room at the boardinghouse. Just as Anne starts crying, Josie Pye shows up, and Anne is delighted to see a familiar face, even though she dislikes Josie. Jane and Ruby visit, and Jane admits that she has been crying too. Josie announces the news of the Avery Scholarship, which provides money for the best student in English to attend a four-year college after his or her one-year program at Queen’s Academy. Anne immediately imagines Matthew’s pride if she were to earn a bachelor’s degree.

Anne’s homesickness wears off as the school year progresses. Midway through the year, the scholars at Queen’s Academy stop their weekend visits to Avonlea and prepare for exams in the spring. Anne finds that though she is as ambitious as ever, her rivalry with Gilbert has lost some of its power. The thought of defeating him academically still excites her because he is a worthy opponent, but she no longer cares about beating him just to humiliate him. In fact, she secretly wishes to be friends with him. Seeing him walking with Ruby Gillis all the time makes her wonder what Gilbert sees in Ruby, since Ruby has none of the ambition or thoughtfulness that Anne and Gilbert share.

Anne’s circle of friends expands as she meets other girls in her class. She also continues her friendship with Aunt Josephine. At the end of the term, while all the other girls are nervous about exams, Anne forgets about the pressure of school and enjoys the beautiful sights of spring.

On the morning the exam results are announced, Anne is too nervous to check the list, but someone spots her name and cries that she has won the Avery Scholarship and Gilbert Blythe the Gold Medal. A swarm of people surrounds Anne and congratulates her, and when Matthew and Marilla come to the Queen’s Academy for commencement, they can hardly contain their pride in Anne’s achievements. Anne goes back to Green Gables after commencement, rejoicing in all the familiar sights and in spending time with Diana. Anne plans to continue her education at Redmond College in the fall, while Jane and Ruby will begin to teach. She learns from Diana that Gilbert will be teaching also, since his father cannot afford to send him to Redmond, which disappoints Anne.

At Green Gables, Anne and Marilla discuss the shaky position of Abbey Bank, where the Cuthberts have always kept their money. Rumors of the bank’s trouble have persuaded Marilla to ask Matthew about moving their money, but he has reassured her that the bank is all right. Anne notices that Marilla and Matthew are not looking well. Marilla says that her headaches have become severe and her deteriorating vision has made sewing and reading uncomfortable. Matthew has been having heart trouble all spring but cannot bring himself to follow the doctor’s order to rest more.

Although Anne has always fantasized about material wealth, fancy jewels, and fine dresses, she has never been overly materialistic or obsessed with acquiring nice possessions. The world of wealth and culture she sees at the White Sands Hotel does not appeal to her as much as her simple life in Green Gables, which is rich in natural beauty, love, and imagination. During Anne’s childhood, Marilla and Mrs. Rachel warn Anne frequently that lofty dreams, especially dreams of wealth, will lead only to disappointment. But Anne is not disappointed when riches do not measure up to her dreams. After indulging in dreams of opulence as a child, she now calmly realizes the worth of her simple, happy life.

As an adult, Anne dreams not of riches and of golden hair, but of academic and professional success. The word “ambition” appears nearly as often in the later chapters as the word “imagination” does in the early ones, showing how Anne’s character has changed. In some ways, however, Anne can cast aside her childhood dreams because they have all come true. The red hair she so loathes as a youngster has turned a rich auburn color. She claims earlier that she would rather be pretty than smart, and now she is both pretty and smart. She earlier wants to be well behaved, and she now comports herself with compassion and maturity as well as good manners.

Anne’s ideas about success change, and she ceases to define success as beating Gilbert Blythe. She even says, “Next to trying and winning, the best thing is trying and failing.” Whereas earlier she thinks that she would rather fail the entrance exam than be beaten by Gilbert, now she does not equate success with winning. When she feels she cannot recite her poem at the White Sands Hotel, she considers leaving the stage, but decides it is better to recite the poem and be humiliated than not to try at all. This newfound belief that losing to another person is not as humiliating as not trying to succeed is a sign of her growing maturity.

Anne’s feelings for Gilbert gradually change too. She thinks of their rivalry with affection and nostalgia, and is disappointed to learn that he will not go with her to Redmond College. She is now able to see that they share many character traits and might have been close friends were it not for her own competitiveness. Anne has not completely outgrown her childish traits, however, and the stubbornness that created the rift in the first place still prevents her from forging a friendship with Gilbert.