Catherine and Isabella pursue two young men down the street. They are surprised to see their brothers, James Morland and John Thorpe, coming down the street in a carriage. James and John join their sisters. James pays his respects to Isabella. He seems romantically interested in her, which Catherine does not notice. John tries to show off to Catherine by bragging about his horse and carriage, but she is only mildly impressed. John offers to take Catherine for rides in his carriage, an offer she accepts timidly, for she is uncertain whether such a thing is proper. Catherine is dismayed to find that John does not like novels, but she is also slightly ashamed of herself for reading them. John asks Catherine to dance with him at the ball, thus "engaging" Catherine for that night, which greatly pleases her.
James and Catherine then discuss the Thorpes, and James clearly hints at his love for Isabella, but Catherine misses the clues entirely. In fact, Catherine thanks James for coming to Bath to visit her. Catherine reads the Gothic novel The Mysteries of Udolpho in the brief time she has before the ball, engrossed to the exclusion of everything around her.
Catherine goes to the dance, happy to have a prearranged partner in John Thorpe. She arrives at the ball with John, James, and Isabella. John immediately runs off to the card room. Isabella tries to wait with Catherine until John returns to dance, but James pressures her so much that she eventually gives in, with her apologies to Catherine. Catherine is disappointed and irritated with John Thorpe. She is still waiting for him when Henry Tilney appears, this time with his sister, Eleanor Tilney. Henry asks Catherine to dance, but to her disappointment, she is forced to refuse him because of her prior arrangement with John Thorpe. John returns from the card-room and the two dance, but Catherine is now annoyed with him for being late. During the dance, Catherine is introduced to Eleanor. After the dance John wanders off while Catherine points out Eleanor to Isabella, and tries to find Henry too. Isabella acts interested, but quickly abandons her friend to flirt with James. Catherine cannot help but feel slightly suspicious at her friend's lack of interest in Henry Tilney. James pressures Isabella into a second dance, despite her protests at the "scandal" of it. Alone again, Catherine returns to her seat with Mrs. Allen and Mrs. Thorpe. She tries to speak with Henry Tilney, but she never gets the chance to. John tries to flirt with Catherine, but she politely excuses herself.
Some critics suggest that Isabella engineered her friendship with Catherine so that she could romance James. She knew the Allens were going to visit Bath with Catherine, and she knew making Catherine's acquaintance would help catch James; perhaps she even arranged for her brother John to bring James with him to Bath. Even if Isabella is not the scheming tactician this interpretation suggests, there is a distinct sense that something was brewing between her and James before they came to Bath. James does not come to Bath to see Catherine, and seems surprised to see Catherine at all; the narrator hints that James comes to Bath to see Isabella. Catherine, in her innocence, has once again failed to read the people around her. She is unaware of the flirtation between James and Isabella, she does not get James's drift when he tells her how much he thinks of Isabella, and she truly believes that James came to Bath to visit her. Catherine also fails to read John accurately, discounting her initially negative impression of him because he asks her to dance at the ball.
Before the ball, Catherine once again dives into The Mysteries of Udolpho. Catherine has a great imagination, but she has not yet learned to use it in concert with her perception, especially in understanding the interaction of people. Chapter VIII takes place almost entirely at the ball. The narrator makes few comments. Instead, Austen's uses her distinctive technique of free indirect discourse to reveal Catherine's thoughts. This technique involves staying in third person narration, but using the style and tone that reflect the way a certain character is thinking. The narrator describes Eleanor Tilney, for example, from Catherine's perspective: "Miss Tilney had a good figure, a pretty face, and a very agreeable countenance." The narrator articulates Catherine's thoughts more eloquently than Catherine could, perhaps, but she voices Catherine's perceptions.