The chapter consists of a long, earnest conversation between the knight and his ignorant squire, who wishes to learn as much as possible about knight-errantry. Don Quixote instructs Sancho that although there are plenty of islands to conquer, they must also accept the many poor and unfortunate situations that knights-errant encounter on the road. Sancho, however, is mainly impressed by the rich prospects following the fortunate encounters. Don Quixote then tells him about a wonderful balm whose recipe he has learned in books of chivalry. This balm can heal a man even though he is sliced in two pieces. "Never mind about the island," Sancho decides right away; "Just supply me with the ointment and I shall sell it for three reals an ounce and be forever content." When night falls, they take shelter among the huts of goatherds who are courteous and share supper and wine with the travelers.
Don Quixote is so delighted to find himself in humble surroundings that, instead of eating, he makes an eloquent speech about the virtues of the Golden Age when men lived in close communion with nature. When human nature lost this purity and innocence, then the order of knighthood was established in order to oppose the torrent of violence. The goatherds do not understand a word of the talk, but they stare attentively and listen while they eat. As if to return the respect of the knight who so sincerely expressed his ideas, one of the goatherds introduces a young boy whose beautiful singing and playing entertains the company. Sancho, who had been gorging himself with meat and wine while Don Quixote made his speech, promptly falls asleep when the music begins.
A new arrival brings them news of a recent death. A young man of the village, Chrysostom, has died for love of Marcella, a coy and beautiful daughter of a rich merchant who has dressed herself in the garb of a shepherdess and pastured her sheep in the hills. So desirable is she that many suitors have dressed themselves as shepherds, driving their flocks into the hills in hopes of gaining Marcella's attention. While shepherds all over the hills are thus pining, sighing, and lamenting, Marcella remains deaf to all words of love and refuses to hear suits for marriage.
Don Quixote sets out the next morning with the goatherds to attend Chrysostom's funeral. They meet a party of shepherds dressed in black, and two gentlemen on horseback who are traveling in that direction. The knight and one of the horsemen, Vivaldo, enter into conversation about knight-errantry while they travel to their destination. At the burial service, one of Chrysostom's friends speaks. This young man, he says, so well-favored in appearance, talents, and person, has died for the love of a cruel and hard mistress. With him are to be buried the beautiful verses he wrote to immortalize the ungrateful Marcella. Vivaldo interrupts to beg that the verses be rescued from oblivion to serve as a warning to others to avoid "such tempting snares and enchanting destructions."