Milo, Tock, and the Humbug are happily working away on the absurd projects they were assigned by the faceless gentleman when Milo points out that he feels like he could go on forever. He decides to use the magic wand the Mathemagician gave him to figure out just how long it will take him to complete his task and discovers that it will be 837 years. Milo confronts the gentleman and discovers that he is the Terrible Trivium, "demon of petty tasks and worthless jobs, ogre of wasted effort, monster of habit."
The travelers run away from the demon, running and scrambling up the increasingly steep and difficult path with the Trivium not far behind them. From nowhere a voice begins shouting what seems to be helpful advice, directing the three companions through a confusing part of the trail. But before they know it, they drop into a deep pit and realize they've been tricked. The owner of the voice introduces himself as the long-nosed, green-eyed, curly-haired, wide- mouthed, thick-necked, broad-shouldered, round-bodied, short-armed, bowlegged, big-footed Monster—or simply the Demon of Insincerity.
The demon warns Milo and his friends not to try to escape from the pit since he is "one of the most frightening fiends in this whole wild wilderness". Tock and the Humbug cower in fear, but Milo pulls out the telescope that Alec Bings told him would show things as they really were. He takes a good look at the Demon of Insincerity and discovers that he is a small, pathetic-looking animal. Crushed by Milo's realization of the truth, the demon wanders away while the travelers climb out of the pit.
They continue along the path for a time and, upon stopping for a rest, find themselves in the palm of the Gelatinous Giant. They do not notice the giant until he announces himself because this demon tries as hard as it can to look exactly like whatever is around it. Being different simply is not safe, the giant explains. Milo cannot believe that someone so big could be afraid of anything, yet the Gelatinous Giant says he is afraid of everything, especially ideas. Milo pulls out the box of words that King Azaz gave him and shoos the giant away with it.
And so the travelers are on their way once again. News of their journey seems to have spread across the demon network, though, and soon an entire throng of monsters is hot on their trail. Once they spot this horrible crowd, among its members all of the demons they had already met, Milo, Tock, and the Humbug press ahead at an even more urgent pace.
Racing ahead, the three companions soon come upon the staircase to the Castle in the Air. As they reach the first step, they notice a little man at a desk with a huge book upon it. The Senses Taker asks all sorts of questions about the travelers that become increasingly trivial, and he writes down all of the answers in his ledger. They become engrossed in the question game and forget all about the castle and the horde of demons chasing them until Milo drops the bag of sounds that the Soundkeeper gave him. The package breaks open and explodes with laughter, pulling Milo from his trance since humor is the one sense the Senses Taker cannot seize.
The travelers bound up the stairs, climbing so high that they push through the clouds. They reach the castle and meet the princesses of Sweet Rhyme and Pure Reason, who have apparently been expecting them. Milo stammers an apology about his trip taking so long because of all the mistakes he made, and the princesses assure him that there is nothing wrong with mistakes so long as he learned from them. Learning is important, they explain, but learning how to use the lessons is important too.
The talk of learning is interrupted by the demons below, who tear apart the staircase and send the Castle floating off into space. Since time flies, Tock volunteers to get everyone back to the ground safely. The group piles on his back, and Tock leaps out the window.
In this section, the themes of education and everyday appreciation reach their climax as Milo does battle with the demons of ignorance and finally finds Rhyme and Reason. Throughout the preceding sections, Milo has been learning lessons that have contributed to his education and his wisdom. As symbols of his accepting of this knowledge, Milo has received a number of gifts that he will also use to defeat the various demons he encounters. Through a combination of his personal changes and the gifts he has received, Milo is able to find his way through a number of demon encounters.
First, we pick up with the faceless gentleman who predictably turns out to be a demon. After setting Milo, Tock, and the Humbug to work on pointless tasks that would take them nearly 1000 years, he thinks he has gotten the better of the trio. Milo, however, has learned about infinity and about boredom, and so he puts the magic staff he got from the Mathemagician to work to calculate how long his assigned task will take. Once he realizes that it is the worst sort of busywork, he unmasks the demon and beats a hasty retreat. The old would most probably have remained, busily moving the pile of sand forever.
Juster repeats this plot pattern with the Demon of Insincerity, who tricks Milo and his companions into cowering in a pit by convincing them that he is a horrible monster. Fortunately, Milo has learned how to see things because of his interactions in the Forest of Sight, and he has the telescope Alec Bings gave him. Once he looks upon the so-called monster with unclouded vision, Milo sees that there is nothing to be afraid of at all, and the demon is defeated. Remember that Alec Bings saw things from an adult's perspective; Milo's ability to use that perspective to his advantage suggests that he has grown up a little during his travels.
Similarly, Milo defeats the Gelatinous Giant with the words Azaz gave him, because there is nothing a conformist hates more than ideas. Even the seemingly mighty giant is no match for Milo's education and wisdom. Finally, at the base of the steps to the Castle in the Air, Milo escapes the Senses Taker by relying on his sense of humor. The laughter that saves him comes from his perspective, symbolically represented by the box of sounds that the Soundkeeper gave him.
When Milo finally reaches the princesses, they explain the need for his trials in the Mountains of Ignorance. It was not enough that Milo learned the lessons of the Lands Beyond; he also needed to learn to put those lessons to good use. It is only when he does that he receives wisdom as represented by Rhyme and Reason. Milo, who once languished in boredom and felt minutes passing like days, has also discovered that "time flies." This proves to be a handy realization as the group uses Tock's ability to fly in order to escape from the Castle in the Air.