The scene shifts to the Dedalus home, where Stephen has returned from boarding school for Christmas vacation. This is the first Christmas dinner during which the young Stephen is allowed to sit at the adult table. The Dedalus family, Dante, Uncle Charles, and a friend of Mr. Dedalus named Mr. Casey are waiting for the food to be brought in. Mr. Dedalus and Mr. Casey chat about an acquaintance who has been manufacturing explosives. The turkey is brought in, and Stephen says grace before the meal.
Mr. Dedalus speaks approvingly of a mutual friend who, by confronting a priest directly, has criticized the involvement of the Catholic Church in Irish politics. Dante strongly disapproves, saying that it is not right for any Catholic to criticize the church. The disagreement soon turns into an angry dispute. Dante quotes the Bible, saying that priests must always be respected. She feels that, as Catholics, it is their duty to follow orders from their priests and bishops without questioning them, even when those orders might be opposed to the Irish patriots' cause.
Stephen watches the dispute with bewilderment, not understanding why anyone would be against priests. He believes Dante is right, but remembers his father criticizing Dante because she used to be a nun. Mr. Casey tells a story of being accosted by an old Catholic woman who had degraded the name of Parnell and the name of the woman with whom Parnell had an adulterous affair. Casey had ended up spitting on the old woman. This anecdote amuses the men but infuriates Dante, who cries that God and religion must come before everything else. Mr. Casey responds that if Dante's words are true, then perhaps Ireland should not have God at all. Dante is enraged and leaves the table, and Mr. Casey weeps for his dead political leader Parnell.
Back at school after Christmas vacation, Stephen listens to a muted conversation between Wells and several other students. They are talking about a couple of boys who fled the school for wrongdoing and were later nabbed. Wells believes the boys stole wine from the school's sacristy. The other boys fall silent at the horror of this offense against God.
Athy gives a different account of the boys' crime. He says they were caught "smugging," or engaging in some sort of homosexual play. Stephen reflects on this suggestion, recalling the fine white hands of one of the students, and thinking also of the soft ivory hands of his neighbor Eileen Vance. One boy, Fleming, complains that all the students will be punished for the wrongdoing of two. Fleming suggests that they could mount a rebellion against such an injustice.
The boys are summoned back into the classroom. After the writing lesson, Father Arnall begins the Latin lesson. Fleming is unable to answer a question and the prefect of studies, Father Dolan, pandies him, or lashes his hands. Afterward, the prefect notices that Stephen is not working and demands to know why. Father Arnall tells Father Dolan that Stephen has been excused from class work because his glasses are broken and he cannot see well. Stephen is telling the truth, but the unbelieving prefect pandies him as well.