- It's the following day and Barbara, Sarah, and Lady Brit are hanging out in the library at Lady Brit's house. Charles comes in and is surprised to find Barbara there, lounging around in fine clothes (i.e., without her uniform on).
- Dolly arrives in rough shape—it seems he was up and out late drinking with Andrew. Once everyone gets over their shock at that news, Dolly reports on how the evening went after they left Barbara at the Army.
- Then Barbara, Dolly, Charles, and Sarah leave the room, and Andrew arrives. Lady Brit quickly gets him to agree to make sure Barbara and Sarah (and their husbands) are provided for, and then the subject switches to Stephen. Andrew is hanging firm on not wanting to bring Stephen into his business, despite the fact that he hasn't yet found a suitable foundling to do the job.
- Then Stephen enters, and they discuss his career prospects. Stephen assures his father that he doesn't want anything to do with his father's trade. They have some heated talk about what Stephen might actually be suited for.
- Sarah, Barbara, Charles, and Dolly return, and Lady Brit goes to get ready to leave to walk to the Undershaft factory. They convince Stephen to tag along as well.
- Then Barbara and her father get on the topic of how he's basically ruined her career, since the fact that the Army could be bought has drained all the enthusiasm from her.
- Barbara is especially mad that she was unable to convert Bill—which she partially attributes to her father's interference. Undershaft tells her to buck up, suggesting that she probably had planted the seeds of conversion in him. And that does cheer her up.
- They then transition over to the factory. When that part of the scene opens, Barbara is standing there alone. Dolly then enters, having just explored the town. He reports Peter Shirley has been hired as a gatekeeper.
- Then Stephen comes in fresh from having been to the town. He seems pretty excited about what he's seen so far.
- Sarah and her father enter. When Undershaft asks Stephen for his opinion, we learn he's basically done a 180 as far as his views of his father/his industry go—he's super impressed.
- Then, Charles exits one of the explosives sheds, where he has just scared the daylights out of Bilton, one of the foremen, by lighting up a cigarette.
- Then Lady Brit enters. The town and its houses have also impressed her. She is angry to have been cut out of this part of Undershaft's fortune, since she likes that kind of stuff.
- Then the talk turns back to the question of who will inherit the Undershaft fortune.
- Lady Brit suggests Dolly, and Undershaft said that would be fine, if only Dolly were a foundling…
- Then Dolly reveals that, in fact, he is kind of a foundling, since his parents aren't legally married in England, only in Australia.
- Once they've determined that Dolly can inherit the business, he and Undershaft start negotiating terms to see if he will do it. They haggle and eventually get a number that works for both.
- Then Barbara and her father go back and forth about their different philosophies/attitudes toward religion. Lady Brit is pretty grossed out by her estranged husband's views and implores Barbara not to listen. In fact, she's so appalled she wants to take all her children and leave right that second. When no one else seems willing to follow, she sits down and resigns herself to her family's moral corruption, it seems.
- There's some more banter, and then the topic turns back to Dolly joining the Undershaft firm. Andrew wants to confirm that Dolly is going to start working for him under the terms already agreed upon.
- Dolly hems and haws, since he's afraid Barbara won't marry him if he says yes...
- Undershaft then takes the rest of the family to the gun cotton shed, leaving Barbara and Dolly to talk.
- Dolly tells Barbara he plans to say yes. He wanted to make the decision before consulting her, since he didn't want to put that on her.
- To his surprise, she's totally fine with that—in fact, she would have dumped him if he had turned it down, she says, and married the guy who ended up taking the job. She is looking forward to the project of saving the souls of people who aren't desperate but rather well fed, and there are plenty in the Undershaft factory and its village...
- The play ends with Undershaft demanding that Dolly be there at 6 a.m. the next day.