All of the guests go home, except for Godfrey, who is spending the night. The household gets ready for bed. Rachel locks the diamond up in a jewelry case in her sitting room. Betteredge suggests that Franklin Blake have a glass of brandy to help him sleep, and Godfrey agrees. Franklin takes the brandy to his room, undecided as to whether he will consume it. Everyone goes to bed.

The next morning, Betteredge awakens to startling news: The diamond is missing. Rachel is very distressed and won’t talk to anyone. Franklin Blake hurries to town to alert the police and have the Indians arrested. When he returns, he explains that the Indians were able to prove that they went back to town after the performance, and weren’t anywhere near the Verinder house. They are being detained by the police nonetheless, and a police officer named Superintendent Seegrave arrives a short time later. Seegrave’s visit exacerbates the tension in the house: He clearly suspects that it was one of the servants, and offends both them and Lady Verinder with his questions. Meanwhile, Rachel remains agitated, and keeps saying that the diamond will never be found.

Betteredge notices that Rosanna has found a reason to speak privately with Franklin Blake, and he asks the younger man about the conversation.