It is now four years into Pip's apprenticeship. Pip and Joe are gathered with a group at the Three Jolly Bargeman listening to Mr. Wopsle perform a newspaper account of a recent murder as if it were a play, impersonating voices of the people involved. A stranger overhearing them interrupts Mr. Wopsle and criticizes him for assuming that the verdict is Ôguilty' before witnesses have been cross-examined and before the prisoner has given his defense. "...do you not know that the law of England supposes every man to be innocent, until he is proved—proved—to be guilty?" the man asks, condescendingly. He asks the party to imagine the effects of Mr. Wopsle's presumptuousness on a jury. Mr. Wopsle is cowed into silence and the group looks down on him.
The stranger quashes the villagers' merriment, scolding them for treating matters of justice as sensational entertainment. He forces the party to take sober responsibility for their own role in the legal justice system by mentioning the jury, and shames them for treating that role lightly.
The stranger requests a private conference with Joe and Pip, who, bewildered, follow the man into a parlor. Pip recognizes the stranger as the man he met on the stairs at Miss Havisham's. The stranger introduces himself as Mr. Jaggers, a London lawyer, and explains that an anonymous person has arranged for Pip to come into a large amount of money (great expectations) and has meanwhile provided a smaller sum of money to release Pip from his apprenticeship and train him to be a gentleman. The only condition is that Pip never change his name. Pip is ecstatic and secretly suspects his patron is Miss Havisham. Joe is supportive and appalled by Mr. Jaggers' suggestion that Joe could be financially compensated for losing Pip. Mr. Jaggers suggests Matthew Pocket as a tutor for Pip and leaves Pip money to buy new clothes. Pip says he will leave for London as soon as possible.
Pip's dreams have come true—his anonymous, generous patron has rescued him from the "common" life he has resented for so long and launched him towards gentility. Yet the stipulation that Pip keep his name implies that his patron wishes Pip to keep the integrity of his identity intact (an implication that Pip, at the time, doesn't realize). Joe is appalled by Mr. Jaggers' suggestion that he could be financially compensated for losing Pip because, in spite of the fact that Pip is Joe's apprentice, Joe's relationship towards Pip is parental, measured in love not in money.
Joe and Pip return to the forge separately. Pip breaks a tense silence to tell Biddy the news. Biddy and Joe congratulate Pip though Pip thinks "there was a certain touch of sadness in their congratulations that I rather resented." As Biddy and Joe relax, Pip grows "gloomy." Looking back, he wonders if he was unconsciously "dissatisfied with myself." Pip suggests that he might conceal his new clothes from their village friends, like Mr. Wopsle and Mr. and Mrs. Hubble, who "would make...such a coarse and common business." Biddy asks Pip whether he will conceal the clothes from the forge as well and Pip, resenting her suggestion, tells her he won't.
Pip misinterprets the sadness in Joe and Biddy's congratulations, not understanding that it is their love for him (not their jealousy of him) that makes them sad. Pip's sudden change in fortune has transformed him instantly into a snob, describing their village friends with the very words that stung him so painfully from Estella's mouth ("coarse" and "common.") Biddy, as usual, sees right through Pip, checking his snobbery.
Pip goes to bed and surveys his "mean little room" that he will soon be "raised above." He feels simultaneously excited for the future and nostalgic for the past. Through his bedroom window, Pip sees Joe smoking outside with Biddy. Because Joe never smokes so late, Pip infers that he must want comforting "for some reason or other." The two speak quietly and Pip hears his name mentioned fondly. The light smoke wreaths floating from Joe's pipe seem to Pip "like a blessing from Joe—not obtruded on me or paraded before me, but pervading the air we shared together."
Pip's ambition leads him to see even his bedroom as something he will rise "above." Again, Pip misunderstands Joe and Biddy and is oblivious to the "reason" for Joe's discomfort, though the reader knows Joe is deeply sad to lose Pip. Pip's comparison of Joe's smoke rings to a blessing describe Joe's ever modest but constant love and generosity towards Pip.