One night, about three weeks after Susan’s death, Henchard decides to tell Elizabeth-Jane the truth about the relationship between him and her mother. Henchard does not admit that he sold the pair, but he does tell Elizabeth-Jane that he is her father and that, during Elizabeth-Jane’s childhood, he and her mother each thought the other dead.
Henchard asks Elizabeth-Jane to draw up a paragraph for the newspaper announcing that she will change her name to Henchard and then leaves her alone to collect her thoughts. He goes upstairs to search for some documents to prove his relationship to Elizabeth-Jane and discovers the letter that Susan wrote before her death. Despite the request to leave the letter unread until Elizabeth-Jane’s wedding-day, Henchard opens it and learns that Elizabeth-Jane is not, in fact, his daughter. The letter informs him that his child died shortly after he and his family parted ways and that the young woman he has welcomed into his home is actually the daughter of the sailor who purchased Susan at Weydon-Priors.
In the morning, Elizabeth-Jane comes to Henchard and tells him that she now intends to look upon him as her true father. Henchard’s discovery of the night before renders her acceptance of him bittersweet, but he decides not to traumatize Elizabeth-Jane further with this additional surprise.
Though Elizabeth-Jane continues to live under his roof, Henchard becomes increasingly cold and distant toward her. He criticizes her country dialect, telling her that such language makes her “only fit to carry wash to a pig-trough,” and describes her handwriting as unrefined and unwomanly. One afternoon, Henchard reprimands Elizabeth-Jane for bringing Nance Mockridge, one of the workers in his hay-yard, some bread and cheese. When Nance overhears Henchard insult her character, she tells Henchard that Elizabeth-Jane has waited on worse for hire. Elizabeth-Jane confirms that she once worked at the Three Mariners Inn, leaving Henchard shocked and afraid that Elizabeth-Jane has compromised his reputation through her menial labor. One morning, on her way to visit Susan’s grave, Elizabeth-Jane sees a well-dressed lady studying Susan’s tombstone. Intrigued, Elizabeth-Jane wonders who she is and thinks about her on the way home.
Meanwhile, Henchard’s term as mayor is about to end, and he learns that he will not be named one of the town’s aldermen. In light of this fact, he becomes even more annoyed that Elizabeth-Jane was once a servant at the Three Mariners Inn. Henchard is further rankled when he learns that she served Donald Farfrae. Considering Elizabeth-Jane a burden of which he would like to rid himself, Henchard writes to Farfrae withdrawing his disapproval of their courtship. The next day, Elizabeth-Jane meets the well-dressed lady in the churchyard. As they talk, Elizabeth-Jane reveals that she is not entirely happy with her father. The lady asks if Elizabeth-Jane will come live with her as a companion, explaining that she is about to move into High-Place Hall, near the center of Casterbridge. Elizabeth-Jane gladly agrees, and the lady arranges to meet her again in a week.
During the next week, Elizabeth-Jane walks by High-Place Hall many times and thinks about what it will be like to live there. One day, while looking at the house, she hears someone approaching and hides. Henchard enters the house without noticing or being noticed by Elizabeth-Jane. Later that day, Elizabeth-Jane asks Henchard if he has any objection to her leaving his house. He answers that he has no objections whatsoever and even offers to give her an allowance.