Allworthy asks Partridge why he has been serving his own son. Partridge tells Allworthy that he is not actually Tom's father. He tells Allworthy what has happened in his life since he was found guilty. First Partridge worked for a lawyer in Salisbury. Then he moved to Lymington, where he worked for a lawyer for three years, after which he set up a school. One day, one of his pigs broke into his neighbor's yard and Partridge was taken to court. Allworthy tells him to get to the point. After seven years in the Winchester jail, Partridge taught at Cork in Ireland. He then moved to Bristol, where he met Tom. Partridge now tells Allworthy that Mrs. Waters, with whom Tom has had a relationship, is Tom's own mother. As Allworthy expresses his horror at the situation, Mrs. Waters walks in and asks to talk to Allworthy alone.
Mrs. Waters tells Allworthy the story of Tom's conception and birth: his father, Mr. Summer, was the son of a clergyman whom Allworthy raised and even sent to the university. Mrs. Waters is not Tom's mother, although she did put the baby Tom in Allworthy's bed. She reveals that Bridget Allworthy, Allworthy's own sister, was Tom's mother. After Allworthy left for London, Bridget approached Jenny's mother and confided her secret in her. Together they contrived to send Deborah Wilkins, the maid, to Dorsetshire to have her out of the way. Allworthy is shocked that his sister did not tell him the truth. Jenny exculpates her, however, by saying that she intended to tell Allworthy one day. Bringing the conversation back to the present, Mrs. Waters tells Allworthy that Dowling approached her and promised her money from a "very worthy Gentleman" if she continued her prosecution of Tom. Allworthy guesses that this gentleman must be Blifil.
Squire Western arrives. He has discovered Sophia's letters from Tom. Allworthy offers to speak to Sophia after he has spoken to Dowling. Once Western has left, Jenny tells Allworthy that she spent twelve years with a man who swore to marry her but never actually did. She fled to Captain Waters for protection, and lived with him for many years under the alibi of being his wife. She met Tom when Captain Waters left to oppose the Jacobite rebels.
Mrs. Waters falls to her knees and praises Tom's goodness in saving her. Dowling interrupts them. Motioning to Jenny, Allworthy asks Dowling if he knows "this Lady." Dowling has to admit that he does. Allworthy now carries out a kind of trial by which he finds out that Blifil was indeed responsible for trying to bring further prosecution against Tom. Allworthy asks how Dowling could have been Blifil's accomplice. Dowling confesses that he already knows that Tom is Allworthy's nephew—on her deathbed, Bridget Allworthy took Dowling's hand and bid him tell Allworthy that Tom was her son. She also wrote a letter to Blifil explaining the story. Dowling entrusted the letter and story to Blifil, who promised to pass on the information to Allworthy.
Mrs. Miller returns and Allworthy tells her the shocking news. Mrs. Miller is overjoyed that Tom has been proven innocent. Before she leaves, Mrs. Waters tells the company that Tom will soon be released from prison. Allworthy summons Blifil and tells him to produce the letter that Bridget wanted him to deliver to Allworthy. Blifil's situation is "to be envied only be a Man who is just going to be hanged."
Allworthy reads Tom's letter to Sophia. The beauty of it brings tears to his eyes. Allworthy visits Sophia and congratulates her on her refusal to marry Blifil, which shows foresight on her part. Allworthy says that he has a different proposal for her—he has another nephew, whom he would like her to marry. Sophia expresses surprise at never having met this mysterious nephew, and Allworthy tells her that it is Tom. Sophia says she can appreciate that Tom must be a worthy nephew, but she cannot accept him as a husband. Squire Western suddenly bursts in and chastises Sophia. In his country dialect, Western bellows that he has a letter from Lady Bellaston relating that Tom is out of prison and on the loose. Western warns Sophia to stay away from the man. Allworthy takes this opportunity to acquaint Western with recent events. Squire Western now begs Allworthy to bring Tom to court Sophia that afternoon.