Before continuing her story, Karana describes the dimensions and geography of her island - the island of the blue dolphins. It is two leagues by one league, and shaped like a fish. The winds on the island are strong (except for the south wind), and because of this the hills are smooth and the trees small and twisted. Ghalas-at is east of the hills, the Aleuts set up their camp to he north.
Chowig warns the people of Ghalas-at that although their agreement with the Aleuts will be profitable to the village, they must not try to befriend the visitors. Remembering the trouble hey cause so many years earlier (which has still not been specified), the villagers make sure they always have someone watching the Aleut camp.
Around this time, the people of Ghalas-at experience a run of good fortune, discovering a school of large bass washed up upon the beach. The Aleuts come and ask for a share of the fish, but Chowig refuses them. Angry and disappointed, the Aleuts return to their camp. Karana ends the chapter by mentioning how her tribe's good fortune would soon bring trouble.
The Aleuts have come to the island of the blue dolphins to hunt otter for their pelts, and Karana describes their hunting methods. She is angry with the Aleuts, for the otter they are hunting are her friends, and she fears the Aleuts will hunt them to extinction. Chowig comforts his daughter, saying that the Aleuts will surely leave soon, and that the otter will afterwards return. Already he has observed in the Aleuts signs that they are preparing to depart from the island. Other members of the village have noticed these signs as well. Chowig fears that the Aleuts will try to sneak away in the night without paying of rhte otter they took.
Chowig's warning to his people about befriending the Aleuts resides with Karana even after he is gone. Such a warning creates an "us versus them" mentality in Karana, and teaches her to categorize others as groups, not individuals. Though she will later overcome such ideology, Chowig's warning and the mentality it represents will be a fairly unyielding part of Karana for much of the novel. Chowig demonstrates his dislike and distrust of the Aleuts again in this section by refusing to share the food his people gathered from the beach with the Aleuts. Chowig's reaction is understandable, however, since the Aleuts' request is far from polite. This chapter is effective in showing the rise in tension between Karana's people and the Aleuts, which will soon become explosive.
Karana's dislike of the Aleuts does not stem from the same source as her father's, however; she is unhappy because the otter, her friends, are being killed. Karana's concern for the otters is the first glimmer of her connection with the animals of Ghalas-at, which will eventually bring her to renounce killing animals for any reason. Though her tribe also kills otters, and Karana herself owns a cape of otter pelts, Karana's sympathy for the animals is brought out by the excessive hunting the Aleuts are doing. Karna fears the extinction of the otters in general, a fact that indicates that she considers otters as a kind of animal to be friends, but does not care specifically for any individual otter. Later, when she makes several animal friends, this view changes.