Queeg's ban on water becomes painful on the trip to Funafuti when a tail wind makes the stack exhaust hover in a cloud around the ship. All day, the sailors' tongues are coated with a thick, itchy, foul-tasting film, and the desire for water becomes unbearable. Maryk begs the captain for a reprieve, but Queeg will not grant it. The next day the heat and wind continue to torture the crew. Finally, the engine room crew starts bootlegging water from the engine compartment. The officers suffer on in agony while the sailors enjoy their ingenuity. Willie hears a shriek from Queeg, who has found the new ensign, Jorgensen, with his shoulders wet with water. The sailors' ban is lifted at five that evening, but the officers are restricted from using water for another forty-eight hours.
When the Caine reaches Funafuti Atoll, it ties up to a destroyer tender ship called the Pluto. Destroyer tenders provide fuel, water, fresh breads, and fruits for the Navy. Willie runs into Ensign Acres, now Lieutenant jg Acres, who is no longer good looking, as he used to be. The former instructor at Furnald is more than forty pounds overweight. Willie learns that after his stint as an instructor, Acres put in for duty on the tender and married. Willie does most of his back work in the Pluto's communication's office. Acres informs Willie that Willie had made Lieutenant jg with the class of February. Willie goes with the officer to buy new silver collar pins. When Willie returns to the Caine, he decides not to report the water ban to the Pluto's chaplain. He notices how lean he looks and feels a twinge of pride in his difficult life.
Queeg made an inquiry about the health of Stilwell's mother, and the response comes. Maryk tells Willie that the captain has planned a court-martial. Willie is to be the recorder of the proceedings. Queeg congratulates Willie and officially endorses his promotion to Lieutenant jg. He explains how to record a court martial, and reveals his hope that Stilwell will be discharged by the court, producing a confession that he forced from Stilwell earlier. Willie studies Courts and Boards, especially the section on confessions, and convinces Stilwell to plead not guilty. Willie is sure he can get the confession thrown out on grounds that it was forced from Stillwell under duress. The next morning, Stilwell tells Willie he talked to the yeoman aboard the Pluto, who was a lawyer in civilian life, and the yeoman convinced him he could be found not guilty. When Willie reports to the captain that Stilwell plans on pleading not guilty, Queeg throws a fit. He immediately sends for Stilwell and when the sailor emerges an hour later, he explains that he will be pleading guilty, and volunteers a new affidavit reading that he had volunteered the confession in no state of duress.
The next day, the four officers of the court, Willie, Maryk, Keefer, and Harding, drink beer until the two o'clock scheduled start of the trial. Keefer, as usual, tries to convince the others of the captain's unsound mind, but Maryk will not hear it. The court hears Stilwell's confession and the jury of Keefer, Paynter, and Harding find the defendant guilty of the charges put forth against him, but only sentence him to the loss of six liberties. They sullenly send up the verdict to Queeg's cabin and wait for the expected response. Five minutes after the end of the trial, Queeg calls a meeting of all officers and berates them for their insubordination. He promises to make them pay for every mistake in their performances and assures them of the poorest possible fitness reports.
Later, Maryk and Keefer discuss the captain's mental state in earnest. Maryk asks Keefer if he would be willing to present their theories on the captain's insanity to the Pluto's medical officer. Keefer balks, and Maryk says, "All right, Tom. That was a request to put up or shut up." Since Keefer is unwilling to act on all his talk, Maryk will no longer allow him to spread his malicious views of the captain. Keefer is silenced. Maryk leaves and retires to his cabin, where he reads a borrowed copy of Mental Disorders.
As the Caine steams from Funafuti for Noumea, it becomes known among the officers that Maryk was writing in his bunk late at night. People speculate on the subject of his writing, but no one guesses the truth. Maryk is keeping a log called "Medical Log on Lieutenant Commander Queeg," marking down all Queeg's daily habits, his sporadic outbursts, and his moods. Maryk's log grew thicker during all the months the Caine bounced around the islands of the Southwest Pacific. Maryk's log chronicles that every time Captain Queeg emerged from his cabin, something awful resulted: Queeg cut off water, coffee, or movies, and announced reductions in everyone's fitness reports.
Finally, the Caine reenters combat duty in the siege of Saipan. This time, Willie has a more mature understanding of combat, and feels scared. The Caine is assigned an antisubmarine patrol. Willie is amused to notice that Queeg changes his position on the deck every time the Caine presents a new side to the shore. Defiantly, Willie does the opposite, exposing himself to the shore with every pass. A Navy Corsair is shot down overhead and lands near the ship. Queeg orders the ship out of formation to investigate the crash. Another destroyer, the Stanfield, also investigates the crash, and comes under fire from a shore battery. Queeg orders evasive action and Willie asks for the Caine's relatively weak guns to be fired the battery. The larger guns on the Stanfield open up, but Queeg ignores Willie's requests for a firing order. The Stanfield takes and returns fire, but the Caine speeds away. The incident is duly recorded in Maryk's log.
The Caine shifts back into escort duty, plowing from Guam to Majuro and back to Kwajalein. Willie, once the captain's pet, becomes his scapegoat. Willie becomes amazingly thorough in his work in order to spite Queeg. Queeg reaches the year anniversary of his deployment on the Caine. As few captain hold their commands for more than a year, Queeg waits expectantly for a dispatch with his relief, but none comes. Willie's lone pleasure and outlet comes from his letters to and from May Wynn. He becomes increasingly attached to her, but also becomes increasingly aware that he is doing her a injustice. The subject of their marriage is never touched.
Between the water famine, the cowardly handling of the attack on the Stanfield, and the declaration of war between captain and crew as a result of the Stilwell court martial, everyone on the ship feels sure that Queeg is unfit for command by the anniversary of Queeg's takeover. Even Maryk, who held out longest, attempts to quiet the crew's complaints simply in the interest keeping the Caine together. In secret, Maryk is writing a secret log of the captain's activities with the idea of eventually using the log to have Queeg removed from command. Keefer is still the leader of the dissenters, but when Maryk ask him to "put up or shut up," Keefer does not want to endanger himself. Keefer boasts several times that he doesn't care if the captain discovers his feelings, but he always says such things in in circumstances where he can be confident that he will not be reported. When in the captain's presence, Keefer is just as submissive as everyone else.
Despite the horror of Queeg's tyranny, the months pass quickly for the crew of the Caine. Large periods of time are not described in the novel, indicating that not much of consequence has taken place. This shows that despite all the complaining, the Caine gets along fairly well. It performs the majority of its tasks with competence. The Caine fails in times when it is thrust into situations it was not designed to handle. The Caine, with its small deck guns, was not designed to trade fire with shore batteries, nor was it intended to provide cover for attack boats, and even target towing is slightly beyond the expected scope of a minesweeper destroyer. The Caine was designed for convoy duty minesweeping activities, duties in which it excels. This raises the question of whether Queeg's failures are really his fault. Is the crew blaming him for failing at jobs that he was not intended to perform? Is their discontent misdirected? It is possible that the Navy knew exactly what kind of commanding officer Queeg would be, and stuck him on a minesweeper destroyer with that in mind, knowing that his inadequacies would not matter much in such a mundane role. The Navy needs for Queeg to follow orders, which he does well. It is Queeg's attitude and methods that turn the crew against him. Though the novel makes us share in the crew's hatred of Queeg, it provides logical grounds for excusing his behavior.
Willie has become a more seasoned officer by his second combat experience. The horror of war has penetrated his youthful carelessness. He is still patriotic, and will perform his duties to the letter, but his entire prospective has changed. Willie is also able to view his relationship with May Wynn from a more objective point of view. At this point, he knows his behavior is wrong.