Making their way back from Delphi, the lords Dion and Cleomenes discuss events in their native Sicilia, and express their hope that the message they bring from the Oracle will vindicate the unfortunate Hermione. Meanwhile, Leontes convenes a court, with himself as judge, in order to give his wife a fair trial. She is brought from the prison to appear before him, and the indictment, charging her with adultery and conspiracy in the escape of Polixenes and Camillo, is read to the entire court. Hermione defends herself eloquently, saying: that she loved the Bohemian king "as in honor he required"(III.ii.62), but no more, certainly not in a sexual fashion; that she is ignorant of any conspiracy; and that Camillo is an honest man. Leontes, paying little heed to her words, declares that she is guilty, and that her punishment must be death. Hermione laughs bitterly at this and says that given her sufferings so far, death would be a blessed release.
At this juncture, the two lords arrive with the Oracle's message. It is unsealed and read aloud—"Hermione is chaste," it reports, "Polixenes blameless, Camillo a true subject, Leontes a jealous tyrant, his innocent babe truly begotten, and the king shall live without an heir if that which is lost be not found"(III.ii.131-34). The courtiers rejoice, while Leontes refuses to believe it; at that moment, however, a servant rushes in with word that Mamillius has died, and the enormity of the king's mistake suddenly comes crashing down on him. Hermione faints, and she is quickly carried away by her ladies and Paulina, who are frantically attempting to revive her. Leontes, now grief-stricken, pours curses upon his own head, and Paulina re-enters and tells him that Hermione, too, has died, and that he has murdered her. One of the lords rebukes her, but Leontes accepts her accusation as no more than his due. Ordering a single grave for the body of his wife and son, he pledges to spend the rest of his life doing penance for his sin.
One of the most striking features of the early part of the play—which serves to highlight Leontes's madness—is the fact that everyone is on Hermione's side. "If th'event o' th'journey / Prove as succesful to the queen—O be't so!"(III.i.11- 12) says Dion, and Cleomenes echoes him "These proclamations, / So forcing fault upon Hermione, / I little like"(III.i.15-17). This general sentiment links up with the emphasis upon Leontes's role as a "tyrant," a phrase that is used repeatedly, culminating in the Delphic Oracle's verdict. The link between the personal and political suggests parallels with Hamlet, in which a personal, even sexual betrayal leads to "something rotten in the state of Denmark." What is rotten in the state of Sicilia, however, stems not from real crimes, but imaginary ones—from a Hamlet-figure who is mistaken in his suspicions.
The revelation of the Oracle is the tragic climax of the play—the moment of awful illumination for Leontes, and the moment of greatest disaster, since it leaves us with Mamillius and Hermione dead, and the baby seemingly lost forever. Hermione's final speech before she passes away is a masterpiece of pathos and wronged innocence. She lists all the terrible things that have befallen her, and then asks "Now, my liege, / Tell me what blessings I have here alive, / That I should fear to die?"(III.ii.105-107). She dies immediately after, and it is important to note that there is no reason for the audience to doubt Paulina's report of her mistress's death at this stage in the play—only later, in the resurrection scene, does the offstage death come to seem suspicious.
But even in the midst of all this woe, the playwright offers a suggestion that this is not a truly unhappy, tragic play. Things seem dark now, but the Oracle's prophecy, with its suggestion that the lost infant may yet be found, offers hope for the future. So when Leontes goes out, saying "lead me / To these sorrows"(III.ii.240-41), one has hope that the sorrows will not be permanent.