Gerald and Lord Illingworth talk while smoking on the terrace. Gerald explains that he has ambitions and wants a career; he says that his mother only doubts his abilities because he performed poorly in his school exams. They discuss women’s power, with Lord Illingworth claiming that women should be appreciated for their beauty rather than their ideas. Lord Illingworth advises Gerald that becoming a fashionable and charming man will allow him to rule society and advance his position more than education or morality can.

The other guests join them on the terrace, and Lady Hunstanton comments on how she believes Lord Illingworth is immoral, but she says she can never understand his witty speech and finds him charming regardless of his character. Afterward, Lady Caroline looks for her husband John, and the guests prepare to leave for the night.

Meanwhile, Mrs. Arbuthnot has a conversation with Hester about women’s morality. Hester views Mrs. Arbuthnot as an ally with similar beliefs, unlike the other women at the party. She asserts that she believes sinful women, men, and their children who have been born out of wedlock all deserve to be excluded from society as a punishment for their failures.