Julia resents Hurstwood's lack of attention toward her and becomes suspicious. She bitterly notes his sudden good humor and the special attention he has begun paying to his appearance. One of Hurstwood's friends sees him with Carrie in a carriage. However, he thinks the woman is either Julia or Jessica. When he encounters Julia, he jests that she is too good to talk to her friends. After some circumspect questioning, she realizes that Hurstwood has been seeing someone and finally understands the reason that Hurstwood has been so busy recently.
Julia and Jessica go to the races and meet another friend of Hurstwood's. He expresses regret that she was too ill to attend the play at Drouet's Elk lodge. The fact that Hurstwood went out for the evening without taking her enrages Julia. Hurstwood returns home after his meeting with Carrie in a cheery mood. Julia behaves coldly with him. Hoping to mollify her, Hurstwood tells her that she can go on vacation if she wants. Julia replies that she does not intend to leave town and leave him free to fool around with another woman. Hurstwood denies her accusations.
Julia demands that he give her the money for the trip to Waukesha the next morning. He refuses, and she asks him who has been keeping him so busy during the evenings. Hurstwood tells her that her accusations are false and that she will not be allowed to dictate the terms of their relationship to him. However, he cannot disprove her accusations, and he remembers with regret that all of his property is in her name. She threatens to get a lawyer if he does not submit to her demands.
Carrie returns home and sits in her rocking chair, staring out the window. Drouet arrives, full of determination to confront Carrie about her affair. He asks her what is going on between her and Hurstwood, and Carrie denies that anything untoward has been happening. Drouet advises her to stay away from Hurstwood because he is married. Carrie is shocked and angry. Drouet accuses her of using him for his money. Carrie declares she will not live with him anymore, but Drouet says that she can stay and that he will leave.
Hurstwood regrets putting his property in Julia's name. He wonders if she's going to publicize his indiscretions. He goes to meet Carrie at their usual place and time, but she never arrives. He checks to see if she has written him a letter, but she has not. Later, he receives a message from his wife demanding that he give her the money she asked for immediately. Hurstwood tells the messenger boy that there will be no reply. Soon, a second note arrives, in which she threatens to inform Fitzgerald and Moy of his indiscretion if he does not give her the money. Hurstwood finally relents and returns home to deliver the money, only to find that he has been locked out of the house.
Hurstwood returns to his office and sends a messenger boy to deliver the money. He spends the whole weekend without word from either Carrie or Julia. On Monday, he receives a letter from a lawyer. Julia has retained legal counsel concerning her property rights and the support Hurstwood owes her as her husband. They request a visit from Hurstwood to discuss the matter. He calls on his son several times, but receives no answer. He still receives no word from Carrie, and he realizes that she must have discovered that he is married. On Wednesday, he receives a letter from Julia's lawyers stating that unless he comes to meet them by one o'clock the next day, they will file suit on Julia's behalf for divorce and alimony. If he fails to meet with them, they will assume that he is unwilling to negotiate any other terms.