Of Isabel's three sisters, she was always considered the intellectual. Edith was the prettiest, and Lillian was the most sensible. Lillian is now married to a lawyer in New York and considers it her duty to look after Isabel. Her husband, Edmund, disapproves of Isabel—when Lillian says that her trip to Europe will give her the chance to develop, Edmund replies that she is already too original and should stop developing at once.
The night before leaving for Europe, Isabel sits in her room thinking about her life; she has felt restless for a long time and longs for a change of scene. This longing has grown increasingly acute since she learned that she would be traveling to Europe. Isabel thinks that she has been lucky in life: she has never experienced anything unpleasant and wonders whether misfortune would be interesting. She remembers her father, whom she loved very dearly. Other people considered her father's handling of his daughters' education to be scandalous, but Isabel is fiercely proud of her independent mind. She thinks about marriage, and reflects that she has few suitors because she is known to spend so much time reading; this frightens many men away. A maid enters to announce the arrival of Caspar Goodwood, Isabel's favorite suitor. Isabel goes down to talk to him, and he soon leaves the house, disappointed.
Ralph Touchett goes to see his mother in her room. Ralph first came to England as a boy, when his father moved there to work in a bank. His father decided to remain in England, but he sent Ralph to be educated in America. After Harvard, Ralph attended Oxford so that he would learn how to be English enough to take over Mr. Touchett's bank. Ralph would have done anything his father asked—he considered his father to be his best friend and admired him very much. Ralph spent two years traveling after Oxford and then began work in the bank. But a worsening lung condition soon forced him to give up work and live as an invalid. Ralph, who has a great appreciation for life, hates his fragility—he says that it is like reading a bad translation of a good book, when he had hoped to master the language. Ralph is quite taken with his cousin Isabel and asks his mother where she plans to take her for her European tour.
Mrs. Touchett says that Isabel will decide for herself but that she does hope to take her to Paris for a wardrobe and eventually to Florence for the autumn. Mrs. Touchett says that she and Isabel both speak their minds, which makes them very compatible. The only problem is that Isabel insists on paying her own way through Europe—Isabel does not know anything about money and cannot afford to pay her own way, so Mrs. Touchett is forced to fool her into thinking that she is doing so, when in fact Mrs. Touchett is funding most of the trip. Ralph wonders what Isabel excels at, and Mrs. Touchett says that Warburton seems to think it is flirting. She says that Warburton will never understand the girl. Ralph asks his mother if she plans to find a husband for Isabel, but Mrs. Touchett denies it.
After dinner that night, Ralph shows Isabel his paintings—he has a passion for art—and notes that she has a good eye. She asks him to show her the manor's ghost, but Ralph says that only people who have suffered can see it. He says that he has seen the ghost, but that Isabel is too young and innocent to see it. Isabel replies that she is not afraid of suffering.
Isabel spends a great deal of time thinking about herself and generally accepts the idea that she is smarter than everyone around her. She has a powerful self- assurance and an extraordinary faith in her own goodness. She often wishes for hardship, so that she could demonstrate her ability to overcome it without losing her moral essence. Isabel often compares herself to her friend Henrietta Stackpole, who is even more independent than Isabel—she is a journalist for the New York Interviewer and professes not to believe in marriage. Isabel loves her time in England. She often visits with Mr. Touchett on the lawn, arguing about the merits of the English—from her reading of novels, Isabel asserts that they are terribly conventional and obsessed with class, but Mr. Touchett replies that being an American in England means that one does not have any particular class affiliation.
Isabel also spends a great deal of time talking to Ralph about English politics. Isabel is very critical of England, but she is fiercely defensive of America. She wonders about Ralph—she realizes that he uses his quick wit to turn everything into a joke while hiding his deeper thoughts and feelings. For his part, Ralph thinks of Isabel constantly and even wonders if he is in love with her. He decides that he is not, thinking that she is like a beautiful building that he can look at but never enter. But he admires her personality: while most women allow men to define their lives, Isabel has her own ideas and plans.
Lord Warburton visits one day; Isabel finds that she is very fond of him, thinking that he seems like the romantic hero of a story. After dinner, the young people sit and talk with Mrs. Touchett, who at last declares to Isabel that they should go to bed. Isabel says that she wishes to stay downstairs and talk to Ralph and Warburton. Mrs. Touchett insists that it is not proper for a young woman to sit alone with young men late at night. Isabel submits and goes upstairs with her aunt. She tells her that she did not know her behavior was improper and says that she would like Mrs. Touchett to tell her whenever her behavior violates social convention. If she knows what the social conventions are, she says, she will be able to tell whether she wishes to follow them or not.
The flashback that opens Chapter 4 is the first time in the novel that Isabel's perspective becomes the center of the novel. Isabel's long rumination about her life and her desire to travel seems fairly natural—these are the things an intelligent girl in her situation would be likely to consider before leaving on a long voyage to Europe—but James also very cleverly uses it to bring out some of the elements of Isabel's character that will define her conflict in Europe later in the novel. He shows, for instance, that Isabel has a very high opinion of her own moral stature and shows her longing for hardship so that she might prove to herself that she could suffer and still remain a good person. We also see Isabel's uncertainty about marriage and about her suitor, Caspar Goodwood, a very stiff but very imposing figure whose apparent power Isabel finds threatening.
Isabel's conversation with Caspar is not recorded in the book, but it is clear to the reader that he has asked her to marry him and that she has rejected him. James uses this technique of skipping over important incidents throughout the novel; many of the most crucial events in the plot are only implied or hinted at in the aftermath of their occurrence. In a narrative, this technique is known as ellipses—literally, the incident that is left out is like a " " in the middle of a sentence. James is a master of elliptical narrative, and will employ it throughout the book.
The narration of Ralph's personal history in Chapter 5 brings us closer to his character, which is one of the most important in the novel. As Lord Warburton noted in the opening scene of the book, Ralph often seems to be skeptical or cynical, and his quick wit causes him to make a joke out of everything, but he is also a deeply loving and well-adjusted young man who forms, in many ways, the moral center of the novel. Where other characters often complain about boredom and suffering, Ralph is in the ultimate position of boredom and suffering—his lung illness essentially forces him to sit on the sidelines of life and watch those around him have experiences he will never have. But instead of complaining, Ralph loves life, and when he meets Isabel, he seems to decide to live vicariously through her. Throughout the book, Ralph will be fascinated by every choice Isabel makes, and he will never pressure her, even though, in the overall scheme of the book, his opinions about her actions and about other people are always right.
Isabel and Ralph develop a very close relationship, which begins in this section as they walk through the portrait gallery and talk about politics and art. Though Isabel is educated and intelligent, she also has a deep-seated, naïve romanticism in her character, which we first saw when she first arrived at Gardencourt and thought that it was like "a novel." In this section, her romantic streak leads to a moment of foreshadowing, as Isabel asks Ralph to show her the ghost of Gardencourt—in every novel, she says, old English manors always have a ghost. Ralph tells her that one must suffer before one can see Gardencourt's ghost and that Isabel has never suffered. At the very end of the novel, Isabel will return to Gardencourt for Ralph's death, and she will see the ghost.
The main thematic conflict of the novel, the struggle between social convention and independence in the life of Isabel Archer, comes to a miniature climax in Chapter 7, when Isabel and Mrs. Touchett argue about whether Isabel should stay up talking to Ralph and Warburton without a chaperone. Isabel rebelliously wants to disregard custom and stay downstairs, but to Ralph's surprise, she docilely obeys Mrs. Touchett.
The implication is that for all that Isabel considers herself independent and seems independent to those around her, she also has a desire to fit in and will not routinely thwart social convention even when it grates her. In fact, Mrs. Touchett, who enforces social convention in this scene, is in many ways far more independent and rebellious than Isabel—after all, she is separated from her husband and lives alone in Florence, making her own decisions and forming her own opinions. Isabel is a charismatic and individualistic character, but she will never really achieve this level of autonomy.