Arriving with Martin in Venice, Candide is disappointed not to immediately find Cunégonde. Martin believes that Cacambo has run off with the money, and that Candide has been a fool. Candide despairs. They begin to debate philosophically about whether or not there is happiness on earth, but are interrupted when Candide notices a young friar and his mistress, speaking affectionately. Candide lays a bet with Martin that these two people are happy. Martin accepts, and they invite the two for dinner in order to find out the truth.
Candide's search for the “best of all possible worlds,” has become a lot less ambitious: by now, with Martin as a companion and philosophical opponent, Candide is just looking for evidence that there are any happy people in the world at all. Martin opposes him, suggesting that Cacambo has stolen the money, and betting that the friar and his mistress are unhappy.
It turns out that the woman is Paquette from Thunder-ten-tronckh, and also, that she is working as a prostitute—her apparent happiness is just part of her job. Even the friar, Giroflée, is not happy: he hates his profession, and was forced to become a monk by his parents. Martin wins the bet, but Candide prolongs it by giving Paquette and Giroflée a large sum of money. With money, he promises, they will be happy. Martin disagrees. Continuing their philosophical debate, they decide to go see the Senator Pococuranté, who supposedly has everything he needs and is a very happy man.
Once again, a new character turns out to be an old character in a new role. Appearance is not reality: just as Candide at first fails to recognize Paquette, he also mistakes she and the friar for a happy couple. Nevertheless, Candide remains faithful to his optimism, betting that perhaps money can make people happy. The gift to Paquette and Giroflée, as well as the visit to Pococuranté, are both meant to test this hypothesis.