Ralph and Arthur go to the Bray home on the wedding morning. Walter Bray, feeling guilty for what he is about to do to his daughter, tells Ralph of a dream he had: ‘‘The floor sank with me. . . . I alighted in a grave.’’ Nicholas and Kate barge in, intending to prevent the marriage by any means possible. Nicholas threatens Ralph with what he knows of the plot. The three hear a crash. Bray’s premonition has been realized; he has died just in time to spare his daughter from her awful fate. Nicholas carries Madeline out to a waiting coach. Madeline subsequently falls ill, but Kate lovingly nurses her back to health. Mrs. Nickleby tells Nicholas that Frank Cheeryble and Kate are in love. Nicholas declares that a marriage between them would be impossible due to Kate’s poverty and the appearance it would create of the penniless Nicklebys taking advantage of the wealthy Cheerybles. Smike grows alarmingly sicker, and he and Nicholas leave for a stay in the peaceful country environs where Nicholas and Kate grew up. Arthur Gride, meanwhile, discovers he has been robbed by his maid, Peg Sliderskew, of papers relating to Madeline’s inheritance that he and Ralph had themselves previously stolen. Ralph discovers that Nicholas has told certain important persons about Ralph’s plot to ensnare and defraud Madeline Bray. This has caused Ralph’s stocks to collapse. Ralph, swearing revenge against Nicholas, hires Squeers to recover the papers stolen from Gride.
Squeers does his dirty work with Peg Sliderskew, getting her drunk so that she will reveal the papers she has stolen. As she at last produces the right one, Newman Noggs emerges from the shadows and knocks Squeers senseless. Smike and Nicholas, meanwhile, revisit many beloved places of Nicholas’s and Kate’s childhoods. Smike asks to be buried under a tree where Kate napped as a girl. Finally at peace— having now known real love with the Nickleby family, and admitting he loves Kate—Smike dies. Ralph, anxious and unable to sleep, worries about Noggs’s absence, little suspecting that his own servant is in on Nicholas’s plot to destroy him. He is surprised by a visit from Charles Cheeryble, who urges Ralph to ask Nicholas’s mercy. Ralph scoffs at the idea. Ralph visits Snawley’s home. His wife informs Ralph that Snawley is now being pursued by the law for pretending to be Smike’s father at Ralph’s request. Ralph next looks for Gride, who hides from him. Ralph finally visits the Cheerybles, because no one else will talk to him. He finds to his astonishment that Newman is there. Newman and the Cheerybles explain how they uncovered Ralph’s plots and reveal that Gride, Snawley, and Squeers had all confessed their parts in Ralph’s schemes. They tell Ralph that the world knows what he has done, and that he ought to go away from London to hide and ‘‘become a better man.’’ Ralph again ignores their advice.
Ralph visits Squeers in jail. Squeers has told the authorities that Ralph had hired him. He, like all of Ralph’s former accomplices, has no respect or even interest in Ralph anymore. Ralph returns home and is summoned by Tim Linkinwater to the Cheeryble house. Once there, the brothers reveal the man Brooker, who tells Ralph that his only son, whom Ralph believed died as a child, had indeed lived a starved and wretched life and died in the arms of his cousin Nicholas. In other words, Smike was in fact Ralph’s son. Ralph smashes a lamp to the ground and disappears without a word. Kate, meanwhile, refuses the marriage proposal of Frank Cheeryble because of her poverty. Nicholas resolves to move Madeline to some other lodgings so that he is not tormented by his own romantic feelings for her. Nicholas and Kate imagine a chaste future together, growing old and kindly like the Brothers Cheeryble. After telling all this to Charles, Charles tells Nicholas that Ralph wants them to both visit him that afternoon. Ralph, meanwhile, alone in his house, imagines the happy life he might have had with his son; the thought that his son died in Nicholas’s arms tortures him. Ralph realizes he has lost his fortune and can never ply his trade again. Thinking of a final way to hurt his family, Ralph hangs himself, crying as he does so, ‘‘Throw me on a dunghill and let me rot there to infect the air!’’