General Yepanchin is happy to introduce Prince Myshkin to Madame Yepanchin and their daughters and to have him join the ladies for lunch. The general is eager to divert his wife's attention from the subject of the pearls that the general recently bought for Nastassya Filippovna. The general begs his wife to see the prince, whom he calls a child and a simpleton.
During lunch, Madame Yepanchin and her daughters find Myshkin quite engaging and they are interested in him. After lunch, the prince tells them that when he first traveled abroad, he felt very sad until he saw a donkey in Switzerland. The Yepanchin girls laugh and the prince joins them, not minding the fact that they are laughing at him just as much as they are laughing with him.
Myshkin tells the Yepanchin ladies the story of a man who is condemned to die but who is pardoned just before the execution. The prince is deeply fascinated by the man's thoughts during the five minutes before his death. He then tells the girls and their mother about a time he witnessed a public execution in Lyons, France. He suggests the face of a condemned man about to die as a subject for Adelaida's new painting.
When the girls beg Myshkin to tell them of being in love, the prince denies that he has ever been in love. He proceeds to tell the story of Marie, a girl from the Swiss village where he lived. Marie was seduced and then abandoned by a traveling merchant, and was then condemned by everyone in the village, including her own mother and the pastor. In order to comfort Marie and to express his pity for her, Myshkin brought her some money and kissed her. Soon, Marie was befriended by some of the children of the village. Though the children believed that the prince loved her romantically, in reality Myshkin only felt great pity for her. The villagers began to dislike the prince because they accused him of corrupting the children. Shortly thereafter, Marie died of consumption. The children continued to take care of her grave. Myshkin then tells the Yepanchins that he loves children; in fact, he prefers their company to that of adults because he does not know how to behave around the latter.
Finally, Myshkin announces that he can read faces. He describes Madame Yepanchin's face as that of a child; she exclaims that he is absolutely correct and praises him for his astuteness. The prince is hesitant to comment on Aglaya's face. After her sisters urge him, he admits her extraordinary beauty, but says that she is not as beautiful as Nastassya Filippovna. The prince says that he saw Nastassya Filippovna's portrait earlier, and the girls demand to see it. Myshkin goes to ask Ganya for the portrait, and Ganya is somewhat angry at the prince for telling the ladies about what he witnessed that morning. Suddenly Ganya asks Myshkin to deliver a note to Aglaya secretly. The prince agrees and returns. On his way back he looks at the portrait of Nastassya Filippovna once again. Amazed at her beauty and overtaken by a feeling of compassion, he kisses the painting.
Madame Yepanchin calls Ganya in and asks him if he is planning on getting married. Ganya replies that he is not. As he says this, he seems very agitated and throws sporadic glances at Aglaya. Later, Aglaya pulls the prince aside and asks him to read Ganya's note. In the note, Ganya promises to cancel his marriage with Nastassya Filippovna if Aglaya says but one word opposing it. Aglaya is disgusted at Ganya's weakness and his attempt to shift the burden of the decision to her. Aglaya asks Myshkin to return the note to Ganya, and she warns the prince that Ganya will never forgive him after such a message.
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