At the Portuguese court, the time of Alexandro's execution has arrived. The King, several nobles, and Villuppo enter, discussing the unexpected nature of Alexandro's treason. The Viceroy soon orders Alexandro to be brought in. The condemned nobleman arrives, still protesting his innocence. The King orders him to be quiet, and, at the king's orders, Alexandro is then bound to the stake, where he is to be burnt. Just before the fire is lit, however, the Ambassador arrives from the Spanish court, with news that Balthazar still lives and that Villuppo has been deceiving the Viceroy. He provides proof of this fact to the Viceroy in the form of letters. The Viceroy, realizing his mistake, orders Alexandro to be released and asks Villuppo why he falsely accused Alexandro; Villuppo admits he did so only out of greed and hope for advancement. The King then condemns Villuppo to a horrible death, ignoring Alexandro's pleas for mercy on behalf of his tormentor. The Viceroy then, while not apologizing to Alexandro for nearly executing on completely baseless grounds, nevertheless seems eager to renew his friendship with the young nobleman.
The setting returns to Spain, where Hieronimo mourns the death of his son in an extended soliloquy. Suddenly, a letter drops, seemingly from the sky, written in blood. The letter has been written by Bel-Imperia and is addressed to Hieronimo. In it, she states that Lorenzo and Balthazar murdered Horatio and then hid her (presumably somewhere in the royal palace) from society so that she could not inform on them. She then urges Hieronimo on to avenge Horatio's death. Hieronimo does not entirely believe the letter at first, suspicious of being led into a trap and resolves to wait for further evidence. Spotting Pedringano, he asks him where Bel-Imperia can be found; Pedringano says that he does not know. Lorenzo arrives, and Pedringano informs him of Hieronimo's question. Lorenzo says that his father, the Duke of Castile, has "removed her hence" because of some "disgrace" and offers to give Bel-Imperia whatever message Hieronimo might have for her. Hieronimo declines, confusedly explaining that he desired Bel-Imperia's help with something (a thing which he does not specify) and then rejects Lorenzo's offer to help in his sister's place. When Hieronimo leaves, Lorenzo reveals his alarm at Hieronimo's question and immediately assumes that Serberine (Balthazar's manservant) has confessed the details of Horatio's murder to Hieronimo. Pedringano objects that Serberine could not possibly have done this, because the manservant had not been out of his sight since the murder. But to be on the safe side, Lorenzo decides to have Serberine killed and offers Pedringano gold if he will do so, which Pedringano accepts. Lorenzo tells Pedringano to be at St. Luigi's Park, assuring him that Serberine will also be there. Pedringano then leaves, and Lorenzo sends a page to Serberine, with the message that the manservant should meet him and Balthazar at St. Luigi's Park at eight o'clock. After the page leaves, Lorenzo reveals in soliloquy that he intends to have the park heavily guarded that night, so that Pedringano will be apprehended upon killing Serberine and most likely executed himself. In other words, Lorenzo is cutting of all the loose ends that connect himself and the Prince to the murder of Horatio.
Scene III.i functions as an ironic reversal of the final scenes of Act II. The ambassador arrives in time to save Alexandro's life, whereas Hieronimo arrives too late to save Horatio's. The grieving Viceroy learns that his son is still alive, whereas the proud Horatio learns that his son is dead. And whereas scenes iv and v of Act II show the commission of a grave act of injustice, Act III shows the remedy of injustice and the commission of justice.
Such an ironic reversal has several effects. First, it allows us some "emotional breathing room" within the play, relieving the unrelenting horror of Act II. Kyd places a hopeful event right after a hopeless event. In doing so, he indicates that in the world of the play, justice is indeed possible. This keeps alive our interest by holding out the possibility of redemptive justice for Hieronimo. Yet the juxtaposition of justice right after an act of injustice also serves to bring out, by contrast, the injustice of Hieronimo's death, the element of unfortunate accident involved in it (that Hieronimo was too late in arriving to save his son or apprehend his murderers and that Bel-Imperia and Horatio had no one to defend them from Pedringano), and the terrible grief now suffered by Hieronimo. And finally, at the Portuguese court, reality and truth are revealed. In Hieronimo's garden, they are hidden from him; he is unable to reach the reality of his son's murder and instead can only perceive the horrible appearances afterwards. So these scenes heighten, in the minds of an attentive viewer or reader, the pathos of Horatio's murder.
The question of justice is taken up by Hieronimo again in his soliloquoy in scene ii. "How should we term your dealings to be just / If you unjustly deal with those that in your justice trust?" asks Hieronimo, directing his questions to the "sacred heavens." His soliloquoy indicates internal struggle, over two key questions. First, he agonizes over his need for evidence as to the identity of his son's murderers. This is framed as a conflict between him and an unjust world that refuses to provide him with any clues, but once he receives the letter from Bel-Imperia, written in her blood, that identifies the killers as Lorenzo and Balthazar, his conflict becomes internal. Will he believe the letter or not? "Hieronimo, beware, thou art betrayed, / And to entrap thy life this train is laid." In giving himself advice, Hieronimo indicates that he himself is divided on this issue, between the advice-giving self and the self that wishes to seek out justice swiftly. A similar division can be seen in his vague references to "dire visions" that "plague his soul": "The ugly fiends do sally forth of hell, / And frame my steps to unfrequented paths." Here, the Christian imagery of temptation is used to express Hieronimo's horror at what must be visions of bloody revenge; yet the fact that he experiences such visions indicates the violent urges and impulses that are growing within Hieronimo's mind.
There is a parallel in the two scenes, in that they are both scenes involving a revelation. In the first, the revelation comes in the form of the arrival of the Portuguese ambassador, who brings news of Balthazar's survival. In the second, it is the blood-written letter of Bel-Imperia that serves as the source of revelation. In the first scene, this revelation is a source of salvation. It saves Alexandro's life and prevents injustice from being done. In the second scene, the revelation does nothing of the sort, since the injustice it seeks to rectify has already been committed. Furthermore, it is not trustworthy, at least not to Hieronimo, though the audience knows that it is indeed truthful. Kyd again creates dramatic tension by placing the truth in front of his protagonist's eyes but only in such a way as to make him suspicious of it. The dramatic irony of Hieronimo's suspicion that someone is deceiving him lies in this: the letter he doubts is actually the true revelation of exactly such a deception, perpetrated by Lorenzo and Balthazar on the entire royal court.