In a forest, Libeaus catches a many-coloured hunting dog at Ellyne's request. A man called Sir Otis claims that it is his, but Libeaus refuses to give it up. He soon finds himself faced by a full-fledged army, which he defeats single-handedly. Sir Otis, too, is sent to Arthur's court. And after many adventures in Ireland and Wales, Libeaus arrives at the beautiful Isle of Gold ('Jl de Ore'), a city of castles and palaces. Its lady is besieged by a Saracen giant called Maugys. After a long and eventful fight, Libeaus is able to kill the giant. La Dame Amour, Lady of the Island, offers the hero her love, and lordship over the Jl de Ore. Libeaus gladly accepts, and for twelve months he lives a life of 'recreauntise'. When one day Libeaus meets the maiden Ellyne, she points out to Libeaus that he has been disloyal to his lord in abandoning his quest. He feels deeply ashamed and leaves the Jl de Ore. With him he takes his horse, his armour and Jurflete, La Dame Amour's steward, whom he makes his squire. They travel onwards, he, Ellyne and his new squire, towards Synadowne.