The narrator claims that the world is full of ordinary people who are divided into two camps: those who are more intelligent and realize that they are ordinary, and those who are less intelligent and therefore do not. Ganya, Varya and Ptitsyn are all very ordinary people. Ganya belongs to the more intelligent camp; realizing his own mediocrity, he continuously strives for originality. He tries to take things to the extreme but is always stymied by his own honesty or prudence. Varya also wishes she were more original, but she attempts to realize her desires through persistent and practical action. In trying to increase his brother's chances with Aglaya, for instance, Varya befriends the Yepanchins, slowly but surely trying to gather information and speaking to the Yepanchin girls about her brother.
A week has passed since the meeting of Prince Myshkin and Aglaya near the park bench. Varya returns from the Yepanchins' to her own house where, along with she and her husband, Ptitsyn, now live Ganya, General Ivolgin, Nina Alexandrovna, Kolya, and even Hippolite. Varya returns saddened; upon finding her brother, who has just had another fight with their father, she tells him that Myshkin and Aglaya are formally engaged. The engagement is to be announced this evening during a dinner party attended by many guests.
Varya thinks Myshkin and Aglaya really do have serious feelings for each other, although she also suggests that Aglaya chose the prince merely to stir up her family. General Ivolgin has been uncovered as the man who stole the 400 rubles. Varya and Ganya tried to keep this from their mother, but she found out anyway; Ganya thinks Hippolite told her. Hippolite has been writing to Aglaya; Ganya suggests that the boy is in love with Aglaya as well. Ganya says he hates Hippolite.
Five days after Hippolite moves into Ptitsyn's house, he enrages General Ivolgin by suggesting one of the general's stories is not true. The general announces to the entire family that they must choose between him and Hippolite. Ganya tells his father that Hippolite was probably right, which leads to another heated argument. The general says he is leaving the house. Ganya turns to Hippolite and angrily tells the boy he should not have provoked the general. Ganya then insults Hippolite with a reference to his unsuccessful suicide. Hippolite replies that he hates Ganya because he is the perfect representative of mediocrity; he then adds that Ganya has no chances with Aglaya. Hippolite says he is about to move out of Ptitsyn's house and into an apartment of his own, which his mother has rented for him.
Ganya shows Varya a note Aglaya wrote to him, which suggests that she, Ganya, and Varya meet at seven o'clock in the morning the next day at the park bench. Ganya gloats with pride.
General Ivolgin leaves the house. Although this was not the first time something like this happened with the general, this time is particularly odd. The general has been acting strangely all week, displaying sudden mood changes and acting very excitable and nervous on the whole. The narrator says that, as human motivations are so complex, he will just tell the events just as they happened.
The general came to Myshkin and said he had something important to discuss. He asked for an hour-long appointment with the prince, which the latter scheduled for the next day. Meanwhile, Lebedev came to visit Myshkin and told him that he found the billfold with the 400 rubles lying under a chair; he pretended not to notice it. After twenty-four hours, the billfold reappeared in the skirt of his coat pocket, having falling in there through a torn pocket. Lebedev once again acted as if he has not noticed it. Myshkin asks him to take pity on the general, who is obviously asking Lebedev's forgiveness, and to act kindly toward the man. Lebedev agrees to try his best.
Part IV begins with a discussion of ordinary people. Such people comprise the majority of the world's population, and there are many of them among the novel's characters—most notably Ganya, Varya, and Ptitsyn. Ganya is miserable because, in his intelligence, he realizes his own mediocrity. All his life he has attempted to be original, but he has not been successful in doing so. He has tried to take different desires to the extreme, such as his lust for money, which he vowed to satisfy at all costs (including marrying Nastassya Filippovna, whom he hates). However, Ganya has always been too middle-of-the-road to remain true to any such desire to the end. His constant battle with his own mediocrity is the primary reason for his irritability and suffering. He is a perpetual loser because he is always doomed to fail. Ganya cannot overcome his nature yet is too smart to fool himself into believing he has become original. Unlike Myshkin, who calls Ganya average without realizing this is the worst thing anyone could say to him, Hippolite calls Ganya mediocre with the clear intention of insulting him. This episode not only underlines yet again the essence of Ganya's character, it also draws another comparison between the prince and Hippolite. While the former is naïve and kind, the latter enjoys humiliating Ganya, who has insulted him.
In addition to better explaining Ganya's actions and motivations, particularly those in Part I, the narrator's discussion of ordinary people also sets up the last portion of the novel, providing a contrast to those people who are not ordinary—namely Aglaya and Myshkin. While Ganya and Varya are incapable of extremes, both Aglaya and the prince are. Certainly, other characters of the novel, such as Nastassya Filippovna and Rogozhin, are the very definition of extremes—self-depreciation and passion, respectively, among other passions. Varya acutely notes that perhaps if Ganya took more advantage of aspects of himself and his family that are not average, such as General Ivolgin, and bore the shame with dignity, Aglaya would find Ganya a lot more interesting. Varya also believes Aglaya has chosen the prince because he is extraordinary.
General Ivolgin's degradation as a man has surpassed his drinking—he is now a common thief. Though the general returns the money to Lebedev, he is clearly the one who initially takes the billfold out of Lebedev's pocket. General Ivolgin is another character—much like Hippolite, Rogozhin, and Nastassya Filippovna—on the verge of destruction. As the novel progresses, the general comes closer and closer to this destruction. First he loses his reputation and the respect of his children, then he loses the command over what he says—the command of language. By the end of the novel, his moral persona is questioned when he attempts to commit a crime—an abortive attempt much like Hippolite's failed suicide. Reading the novel, we must note how Myshkin attempts to help these characters on the verge of self-destruction and whether he is ever successful.