In the third tale, Morgan sends a peace offering to Arthur — a mantle wrought of jewels. He is impressed but says nothing. Nineve, the Damsel of the Lake, advises him to ask the messenger from Morgan to put on the mantle herself. When she is forced to do so, the messenger bursts into flame and burns to ashes. In his fury Arthur banishes Morgan's son Ywain, suspecting him of complicity. Gawain leaves with him "for whoso banyshyth my cosyn jarmayne shall banyshe me."
As Gawain and Ywain ride through a forest they find twelve maidens spitting on a white shield. When they ask what this means, the maidens explain that the shield belongs to the knight Marhault, a man who scorns all women. Marhault draws near, and Ywain and Gawain fight him. When he has overcome them both, he does not kill them, but tells them that he has been falsely accused. The twelve maidens are enchantresses. The three knights resolve to ride together.
In the mysterious country of Arroy they find a fountain and three damsels, one old, one middle-aged, one young. The three damsels are here, they say, to guide errant knights to adventure. Each knight must choose a lady and ride with her for a year. Ywain takes the oldest, Marhault takes the next, and Gawain takes the youngest. Then each knight goes his separate way with his guide.
Sir Gawain is quickly abandoned by his lady: he avoids a fight she advises him to take upon himself. When later he does help the knight he was earlier advised to help, he betrays his trust. He tells the knight, Sir Pellas (son of the maimed king, Pellam), that he will win the love of his haughty lady for him; but Gawain lies with her instead. Pellas is tempted to kill Gawain for his treachery, but at last he merely leaves a sign that lie knows, then retires. Nineve avenges Sir Pellas by forcing his disdainful lady to dote on him and by freeing Pellas of his passion for her. By yet another spell, Nineve makes Pellas her own lover and they live together happily.
