Rev. Lyon learns from Maurice Christian, servant of Philip Debarry, about the possible identity of Esther's biological father. Rev. Lyon decides to tell Esther the truth about her father. Esther's outlook on life changes upon finding that she is in fact Rev. Lyon's stepdaughter. Her relationship with her stepfather deepens, while she also desires to emulate the high moral standards impressed upon her by Felix Holt. Seeing the change in Esther's character, Felix Holt begins to fall in love with her. However, both share the feeling that they are destined never to marry each other. Meanwhile, Rev. Lyon challenges Rev. Augustus Debarry to a theological debate. The debate is initially agreed to, but is cancelled at the last minute.