Don Quixote has decided to imitate the penance suffered by his hero, Amadis of Gaul, who spent his time of distraction passively and pensively. He writes verses to his Dulcinea and does a great deal of lamenting and sighing. Sancho, meanwhile, making his way toward Toboso, encounters the curate and barber, who are stopping at the very inn where he had been tossed in a blanket. They inquire after Don Quixote, and Sancho presently tells them of all the adventures and of his present mission to Dulcinea. He now discovers that he has forgotten to take the letter, but the curate and the barber promise to rewrite it from his dictation. They remind him that in order for his master to reward his services with an earldom, he must first be made to give up "this unprofitable penance." Sancho then is willingly instructed in a stratagem to bring Don Quixote out of the wilderness.
Dressed in their disguises, that of a distressed damsel and her gentleman-usher, the barber and the curate and the squire reach the foot of the Sierra Morena. Sancho goes ahead in order to give Don Quixote the fictional message from Dulcinea, which is that he must put an end to his penance and repair immediately to her side. In the meantime, the barber and the curate meet Cardenio, who tells them the entire story of his misfortunes, Cerventes continuing the narrative at the point he left it.
Ferdinand fell in love with Lucinda and plotted to get rid of his friend in order to marry her. Sending Cardenio on a bogus errand to his brother, Ferdinand gains the father's permission to wed Lucinda, and the wedding takes place. Cardenio returns just in time to witness secretly the marriage vows of his promised bride. Saddened that Lucinda would rather marry Ferdinand than commit suicide as she promised, Cardenio plans to live his life in the wilderness, mournful and almost insane.
As Cardenio concludes his story, their attention is attracted to a new sound of lamenting. They discover a young girl dressed in boy's clothing, and in order to excuse her appearance, the beautiful damsel tells them this story: She, Dorothea, is the daughter of a very rich Andalusian farmer, a vassal of one of the grandees of Spain. The Duke's son, Don Ferdinand, paid great court to her, which she tried to ignore because of the inequality of their parentage. Ferdinand, promising marriage and eternal loyalty, seduced Dorothea after having gained access to her bedroom by bribing the maid. After that night, his affections cooled, and the next news that Dorthea received was that Ferdinand was to marry. She followed her false lover to Lucinda's village and there heard the startling result of the wedding. The bride, fainting right after she spoke the vow, had a letter hidden in her dress, saying that she could not marry Ferdinand because she was already betrothed to Cardenio. Dorothea concludes her narrative by explaining how she arrived at the Sierra Morena.
Cardenio identifies himself as Lucinda's betrothed, and he vows to protect Dorothea and to brave any hazard in order to see her righted by Don Ferdinand. The curate now tells them why he and the barber happen to be in the mountains, and all agree that Don Quixote should be cured of his strange madness. Dorothea offers to play the part of the distressed damsel, saying she is familiar with books of chivalry and understands how to act.
Sancho returns, delighted to find that the maiden in distress is a princess who will, no doubt, marry his master. Don Quixote, who will rule her kingdom, will then reward his squire with an earldom. They soon arrive at the knight's retreat, and Dorothea throws herself at his feet and begs his services. The knight promises immediately to help her and not engage in any other adventures until he has rescued her kingdom. The entire party, including Cardenio, the curate, the barber, and Dorothea, now leads the knight and squire in the direction of Don Quixote's village.