Part III begins with a description of "practical" people and the constant lack of such people. The narrator asserts that the definition of a practical man is one who lacks originality or initiative. As a result, in Russia it is much more prestigious to be a general than an inventor or genius, for being a general is sign of a stable and quiet life. The Yepanchins, however, are not an example of an ordinary family, perhaps due to the eccentricity of Lizaveta Prokofyevna, Madame Yepanchin.

Madame Yepanchin has always known of her eccentricity and has felt somewhat self-conscious about it, even though society has always highly respected her just like General Yepanchin. Lizaveta Prokofyevna constantly suffers anxiety regarding the marriage of her three daughters, and she frequently becomes irritable and experiences mood swings as a result. Recently some of her anxiety has subsided in light of the prospective marriages of Adelaida to Prince S. and Aglaya to Radomsky.

In the past few days, however, the Yepanchin household has once again been in turmoil. Aglaya has been hysterical for three days. Madame Yepanchin received an anonymous letter stating that Aglaya was in correspondence with Nastassya Filippovna. Now Madame Yepanchin regrets that she dragged Prince Myshkin to their house and spoke to him about it.

Madame Yepanchin, Myshkin, the three Yepanchin sisters, Prince S., and Radomsky are all sitting on the Yepanchin veranda. Prince S. jokingly criticizes Russian liberalism, which seems to attack Russia itself rather than order. Myshkin takes Prince S. very seriously and replies with his opinion on the perversion of the morals in young people. Radomsky then notices an inconsistency in Myshkin's line of argument: how can Myshkin not have noticed in Burdovsky and his group the same moral perversion of which he complains now?

Kolya enters and says that Hippolite has moved into Lebedev's cottage. Kolya also says that yesterday Hippolite kissed Myshkin's hand. Everyone decides to go to the park. Before they do, Myshkin begins to apologize to Radomsky for making great ideas sound ridiculous. Suddenly Aglaya exclaims that Myshkin is better than anyone else present and that he should not apologize to anyone. Kolya cries "poor knight," hinting at Aglaya's interest in Myshkin. Aglaya cries that she will never marry Myshkin, who replies that he had no intention of asking her. Suddenly everyone starts laughing, and they all go to the park.

As they are walking though the park, they see three women surrounded by a group of admirers walking loudly toward them and attracting attention. Myshkin is filled with horror as he notices Nastassya Filippovna. She approaches Radomsky and begins to speak with him as if she knows him. Radomsky's friend makes an insulting remark toward her, so she takes a quirt and whips him across the face. The officer friend is about to attack Nastassya Filippovna, but Myshkin prevents him.