Nicholas meets Frank Cheeryble, a nephew of the Cheeryble brothers. Frank is a younger version of his amiable uncles, and Nicholas is immediately worried that the mysterious girl may be intended for him in marriage. The brothers bring the young Frank along when they pay a visit on the Nicklebys. Frank is immediately smitten with Kate. Ralph is approached by a man named Brooker, who, professing to know some secret about Ralph, tries to bribe him. Brooker asks, ‘‘Are those of your own name dear to you?’’ and Ralph answers, ‘‘They are not,’’ assuming Brooker refers to Nicholas and Kate. Newman Noggs follows Brooker and listens closely to Mr. Brooker’s story. The Nickleby household hosts a tea party for John Browdie, Smike’s savior on two occasions, and his new wife Tilda. Ralph suddenly appears, accompanied by Squeers and another scoundrel, Snawley, who has brought what Ralph says are documents proving that Smike is actually Snawley’s son. Nicholas and John refuse to give Smike up, although Ralph threatens Nicholas with legal proceedings that will ruin his future prospects and ‘‘make this house a hell.’’
The Cheeryble brothers tell Nicholas that Ralph has been to see them regarding Smike, and that they told Ralph to leave. They also relate the story of the beautiful girl, whose name is Madeline Bray. She is the daughter of the woman Charles Cheeryble himself hoped to marry in his youth, but who instead had married a scoundrel and soon died. The girl works night and day to support her sick father. The Cheerybles enlist Nicholas in their plan to help her. He agrees to participate, although he worries that his own interest in the girl may cloud his abilities. He goes to her house, pretending to be interested in buying her paintings, but blurts out that he would die to serve her. Madeline weeps with gratitude. Ralph, it turns out, has plans to marry Madeline off to an old miser named Arthur Gride in return for money he needs to pay off an old debt of Madeline’s father. Gride and Ralph also know that Madeline will inherit property when she marries and plan to trick her out of it. Kate, meanwhile, has romantic feelings for Frank Cheeryble, who has become a regular visitor to the cottage. Smike sits alone in his room and continues to seem very melancholy, although he will not tell Nicholas the cause. Smike is diagnosed with consumption, a disease that ‘‘so prepares its victim, as it were, for death.’’
Sir Mulberry Hawk, mostly healed, swears to murder Nicholas. Lord Frederick Verisopht vows to prevent this. The two duel; Verisopht dies and Hawk flees to France. Meanwhile, Nicholas learns from Newman about Madeline’s upcoming marriage to Gride and bolts from the house with Newman chasing him. Nicholas begs Madeline to postpone the marriage for one week, in which time the Cheerybles will have returned from abroad. She protests that she cannot delay, for her father will surely die if not restored to affluence by this marriage. Nicholas staggers to the home of Arthur Gride, offering him money to put off the wedding and hinting that he knows of the plot to defraud Madeline of her inheritance. Gride, assuming he is bluffing, refuses.