The next day, Higgins and Pickering are just resting from a full morning of discussion when Eliza Doolittle shows up at the door, to the tremendous doubt of the discerning housekeeper Mrs. Pearce, and the surprise of the two gentlemen. Prompted by his careless brag about making her into a duchess the night before, she has come to take lessons from Higgins, so that she may sound genteel enough to work in a flower shop rather than sell at the corner of Tottenham Court Road. As the conversation progresses, Higgins alternates between making fun of the poor girl and threatening her with a broomstick beating, which only causes her to howl and holler, upsetting Higgins' civilized company to a considerable degree. Pickering is much kinder and considerate of her feelings, even going so far as to call her "Miss Doolittle" and to offer her a seat. Pickering is piqued by the prospect of helping Eliza, and bets Higgins that if Higgins is able to pass Eliza off as a duchess at the Ambassador's garden party, then he, Pickering, will cover the expenses of the experiment.
This act is made up mostly of a long and animated three-(sometimes four-)way argument over the character and the potential of the indignant Eliza. At one point, incensed by Higgins' heartless insults, she threatens to leave, but the clever professor lures her back by stuffing her mouth with a chocolate, half of which he eats too to prove to her that it is not poisoned. It is agreed upon that Eliza will live with Higgins for six months, and be schooled in the speech and manners of a lady of high class. Things get started when Mrs. Pearce takes her upstairs for a bath.
While Mrs. Pearce and Eliza are away, Pickering wants to be sure that Higgins' intentions towards the girl are honorable, to which Higgins replies that, to him, women "might as well be blocks of wood." Mrs. Pearce enters to warn Higgins that he should be more careful with his swearing and his forgetful table manners now that they have an impressionable young lady with them, revealing that Higgins's own gentlemanly ways are somewhat precarious. At this point, Alfred Doolittle, who has learned from a neighbor of Eliza's that she has come to the professor's place, comes a-knocking under the pretence of saving his daughter's honor. When Higgins readily agrees that he should take his daughter away with him, Doolittle reveals that he is really there to ask for five pounds, proudly claiming that he will spend that money on immediate gratification and put none of it to useless savings. Amused by his blustering rhetoric, Higgins gives him the money.
Eliza enters, clean and pretty in a blue kimono, and everyone is amazed by the difference. Even her father has failed to recognize her. Eliza is taken with her transformation and wants to go back to her old neighborhood and show off, but she is warned against snobbery by Higgins. The act ends with the two of them agreeing that they have taken on a difficult task.
Even though Higgins is immediately obvious as the Pygmalion figure in this play, what this act reveals is that there is no way his phonetic magic could do a complete job of changing Eliza on its own. What we see here is that Mrs. Pearce and Colonel Pickering are also informal Pygmalions, and with much less braggadocio (the alliteration of Pygmalion, Pearce, and Pickering would support this notion). Only with Mrs. Pearce working on the girl's appearance and manners, and with Pickering working, albeit unknowingly, on her self-respect and dignity, will Eliza Doolittle become a whole duchess package, rather than just a rough-mannered common flower girl who can parrot the speech of a duchess. We learn in this scene, quite significantly, that while Higgins may be a brilliant phonetician, Mrs. Pearce finds fault with his constant swearing, forgetful manners, quarrelsome nature, and other unpleasant habits. His own hold on polite respectability is tenuous at best, and it is only his reputation, and his fundamental lack of malice that keeps him from being disliked by others. If Higgins cannot be a Pygmalion on his own, and is such an untidy, mannerless Pygmalion at that, then the obvious question posed to us is if Pygmalion, the transformer of others, can himself be transformed. Implicit in this question is another: whether it could be imperviousness to change, rather than superior knowledge, which differentiates Pygmalion from Galatea.
This act shows Higgins as an incorrigible scientist. He is not only "violently interested in everything that can be studied as a scientific subject," but interested in them only as subjects of scientific study. For that reason, when "quite a common girl" is said to at his door, Higgins thinks it is a lucky happenstance that will allow him to show Pickering the way he works. When he sees it is Eliza, he chases her away, for, having learned all he can about the Lisson Grove accent, he cannot see how she can be of any more use to him. Later, his mind seizes upon her as being "no use to anybody but me." And when Alfred Doolittle is announced, Higgins is not worried about the trouble, but looks forward instead to listening to this new accent. He displays such a dogged determination and exaggerated focus on his work that it is hard to tell if Shaw wants to make fun of this character or put it on a pedestal. In either case, there is no denying that Higgins makes an absolutely inept romantic hero. For him, if women do not inform his science in any way, "they might as well be blocks of wood." Eliza's criticism comes well-deserved--"Oh, you've no feeling heart in you: you don't care for nothing but yourself." Even Mrs. Pearce chides him for treating people like objects--"Well, the matter is, sir, that you can't take a girl up like that as if you were picking up a pebble on the beach."
Alfred Doolittle is one of those delightful, quintessential characters that populate all of Shaw's plays. He makes the most iconoclastic, scandalous statements, but all with such wit and humor that we cannot help but find his ideas attractive. In this act, Doolittle performs the extra role of inspiring Higgins break off in the middle of their conversation to analyze Doolittle's language and comment that "this chap has a certain natural gift of rhetoric." This unnatural break to the flow of talk forces us to pay a similar attention to all the rhetoric of the play.
There is a brief episode in this act in which Eliza threatens to leave because Higgins is being so rude to her, and he calls her an ingrate. She does not leave because he uses chocolates to tempt her back. This is in contrast to the final act when Higgins again calls her an ingrate. However, in the last act, to his request that she return with him, she does indeed step out the door, leaving Higgins alone in the room.