When Pao-yu's sister Yuan-chun is chosen as an Imperial concubine (Imperial Consort), the Chia family grows even more affluent and influential. They build Grand View Garden (Ta-kuan Garden) to honor and entertain Yuan-chun when she comes back for a visit; it is a vast, beautiful setting where the whole family can dine together in great happiness.
Pao-yu clearly has a preference for feminine company and spends most of his time with his girl cousins and young maid-servants, such as Hsi-jen, Chin-wen, Tzu-chuan, and Hsueh-yen. Not surprisingly, his father, Chia Cheng, is very strict with him and often criticizes him for spending so much time with the girls instead of studying the classic works that he will be tested on during the all-important official examination. Pao-yu, however, is a rebellious character. Contrary to feudal ethics, he isn't interested in an official career. What he cares for most is playing freely with innocent girls and writing poems while yearning for the freedom to love and marry whomever he chooses.
Because of the concept of feudal fatalism, the Chia authorities — represented by Lady Dowager, Chia Cheng, Lady Wang, and Wang Hsi-feng — decide to choose Pao-chai as Pao-yu's bride — instead of the lovely, but sickly (and rebellious) Tai-yu. In their opinion, Pao-yu and Pao-chai are a perfect couple. Their marriage will be a symbolic union between a "precious jade" and a golden locket." Therefore, when they become aware of the fact that Pao-yu deeply loves Tai-yu, they decide to play a cruel trick on him. They tell him that he will be married to Lin Tai-yu; secretly, though, they plan to have him marry the heavily veiled Pao-chai. Unfortunately, the secret is leaked to Tai-yu, and she falls unconscious and begins spitting blood.
On Pao-yu's wedding day, Lin Tai-yu is left alone — sick in bed, accompanied only by Tzu-chuan. She breathes her last in loneliness, grief, and hatred, while Pao-yu goes merrily to the wedding ceremony, assuming that his bride will be Lin Tai-yu. When he finds himself married to Hsueh Pao-chai, he goes out of his mind.
Meanwhile, the Imperial concubine dies and Chia Sheh is deprived of his rank for conspiring with provincial officials to take advantage of the weak. His properties are confiscated, and the house of Chia Cheng is involved. The grandmother dies, the nun Miao-yu is kidnapped, Wang Hsi-feng loses authority and dies in regret and with a guilty conscience.
