Juan Crisostomo Ibarra is a young Filipino who, after studying for seven years in Europe, returns to his native land. Ibarra is engaged to Maria Clara, the supposed daughter and only child of Capitan Tiago. Ibarra was despised by Father Damaso at the feast.
Before Ibarra went home, he saw Lieutenant Guevarra who announced that his father, Don Rafael Ibarra, had died a year ago. He also found out the true reason of his father's death.
Father Damaso teases Ibarra again. When the priest insulted his father for a moment, Ibarra got angry and tried to stab the priest but Maria Clara stopped him.
On the evening when Capitan Tiago gives a ball in his Manila house to celebrate his supposed daughter's engagement with the young Spaniard to avoid public scandal, Ibarra makes his escape from prison and succeeds in seeing Maria Clara alone.
Ibarra's escape had been effected by Elias, who conveys him in a banka up the Pasig to the lake, where they are closely beset by the Civil Guard that Elias leap into the water and draws the pursuers away from the boat, in which Ibarra lies concealed.
In a gloomy wood, Elias appears wounded and dying, to find out that there is a boy named Basilio beside the corpse of his mother. Basilio, who is ignorant of Elias's identity, helps him to build a funeral pyre, on which his corpse and the madwoman's are to be burned.