Franklin continues to try to win Rachel's heart and has even given up smoking at her request, though he sleeps badly without his habit. His chances seem diminished, though, when, on June 16, a foreign gentleman visits him at the Verinder house about business— Betteredge presumes business of a woman or a debt. The servants overhear Rachel reprimanding Franklin for his conduct in Europe, though they are painting happily again in several days.

Rosanna has been rude to Rachel and has been seen snooping around Franklin Blake. Betteredge has covered for Rosanna's strange behavior by telling Lady Verinder that Rosanna is sick. Lady Verinder sends for the doctor on 19 June and suggests she be moved to a farm inland, but Rosanna pleads to be allowed to stay.

On the morning of Rachel's birthday, Betteredge and Franklin consult about the Moonstone. Franklin is indecisive, but Betteredge reassures him that he must bring the diamond for Rachel and suggests that he ride with Godfrey Ablewhite and Godfrey's sisters on the way back from the bank.

At three o'clock, Franklin and Rachel finish painting her door, and Franklin leaves for Frizinghall. When Franklin returns with the Ablewhites, Betteredge notices that Godfrey, like Franklin earlier, seems to be out of sorts. Penelope is sent to tell Rachel that Franklin wants to see her.

Several minutes later, Betteredge hears a scream from the drawing room and enters to find Rachel holding the diamond, with everyone around her fascinated. Franklin is not fascinated, as he looks anxiously out the window, and nor is Lady Verinder, who is busy reading Herncastle's will. Lady Verinder frowns and tells Betteredge to come to her room in a half hour. Rachel shows Betteredge the diamond, which seemed "a yellow deep that drew your eyes into it so that they saw nothing else." Betteredge becomes as excited as everyone else, except Godfrey, who sensibly proclaims the diamond "mere carbon."

Betterege reports to Lady Verinder, who wants to consult with him about Herncastle's possible motives in leaving the diamond to Rachel. Soon afterwards he hears from Penelope that Godfrey Ablewhite has proposed to Rachel and that Rachel has refused him. Betteredge goes into the hall to meet the dinner guests.