Mrs. Higgins is sitting in her drawing room. Her parlor-maid announces that Higgins and Pickering are downstairs, telephoning the police. Mrs. Higgins tells the maid to go upstairs and tell Eliza that Higgins and Pickering are here. Higgins bursts in and tells his mother that Eliza has run away.
Higgins and Pickering are frantically trying to find Eliza, as if she were a lost pet. Mrs. Higgins wisely keeps Eliza upstairs so that she can try to resolve the situation.
Mrs. Higgins tells her son to calm down and says that Eliza has the right to leave his house when she wants. Pickering enters, having spoken with the police. Mrs. Higgins asks what right they have to go to the police as if Eliza were "a lost umbrella."
Mrs. Higgins stands up for Eliza, whom Pickering and Higgins are treating as if she is an object that they own.
The parlor-maid enters and announces that a gentleman named Mr. Doolittle has arrived at the house. Higgins assumes that it is a relative of Eliza's she never told him about, but it actually turns out to be her father. Mr. Doolittle enters, dressed like a gentleman, angry at Higgins.
Because of Mr. Doolittle's new appearance, the maid introduces him as a gentleman and Higgins assumes that it cannot be the same Mr. Doolittle he met earlier.
Mr. Doolittle is not aware that Eliza is missing, though, and so Higgins is confused as to why he is mad at him. Doolittle says that Higgins mentioned him to a wealthy American named Ezra D. Wannafeller, who founded Moral Reform Societies across the world. Higgins had joked that Mr. Doolittle was "the most original moralist," in England, and Mr. Wannafeller left Mr. Doolittle money in his will, on the condition that Mr. Doolittle speak at Wannafeller's Moral Reform World League.
Higgins' joke—making fun of Mr. Doolittle's rejection of Victorian morals as luxuries unaffordable by the poor; which really was a rather unique moral position in Victorian England—unintentionally brought Mr. Doolittle a fortune. Like his daughter Eliza, Mr. Doolittle has now also undergone a transformation, rising in the social hierarchy. The luck involved in Mr. Doolittle's rise implicitly criticizes the common Victorian notion that the wealthy deserve to be wealthy because of some inner worth. More likely it was just luck that lifted up their ancestors, and then they themselves were rich simply because they were rich.
Mr. Doolittle is upset at being turned into a wealthy gentleman. He says that he used to be free, but is now worried, has people asking him for money all the time, and has to see doctors. He says that family members have suddenly turned up to ask him for money, and scoffs at "middle class morality."
Mr. Doolittle says that now he has to learn proper English from Higgins, and suspects this was Higgins' plan all along. Mrs. Higgins tells him that he can reject the inheritance, but Mr. Doolittle says that he doesn't have "the nerve" to say no to the money, as he is poor. He says he faces a choice between "the Skilly of the workhouse and the Char Bydis of the middle class."
Mr. Doolittle presents his inability to reject the money as a lack of nerve to reject the comforts provided by money. He also feels as if, now that he has money, that he must appear like he has money, in dress and speech. In his uneducated, lower-class speech, he compares this dilemma to being stuck between Scylla and Charybdis (another expression for being stuck between a rock and a hard place)—stuck between the discomfort of being poor if he rejects the money and all the responsibilities of being wealthy if he keeps it.
Mrs. Higgins says that Mr. Doolittle can take care of Eliza now that he has money. Higgins protests, saying that Eliza belongs to him, since he paid for her. Mrs. Higgins tells her son not to be absurd, and then reveals Eliza is actually upstairs. She tells Pickering and Higgins that she has learned of how horribly they treated Eliza, though both insist they treated her well.
Higgins squabbles over Eliza like a possession or pet, wanting her because he has paid for her, not because he is fond of her as a person. Mrs. Higgins is frustrated by her son thinking that he owns a woman—it is telling that neither Pickering nor Higgins can even understand what she is criticizing them for.
Mrs. Higgins scolds them for having talked about how glad they were that their experiment was over, when Eliza had become attached to them and had worked hard for them. Pickering concedes that he and Higgins were maybe inconsiderate to Eliza. Mrs. Higgins says she will bring Eliza down if Higgins will behave. He sulks, but agrees. Mrs. Higgins has Mr. Doolittle leave the room while she sends for Eliza.
Mrs. Higgins scolds Pickering and Higgins for seeing Eliza merely as an experiment, not as a person. She again has to remind Higgins of his manners, even though he is the one who supposedly taught Eliza how to behave well. Pickering begins to see the truth of it, but the stubborn Higgins refuses.
Eliza enters and is very polite, which is baffling to Higgins. He tells her to "get up and come home." He says she doesn't have an idea or word in her head that he didn't put there himself. He continues to insult Eliza, who ignores him and talks politely to Pickering.
Ironically, Eliza now has better manners than Higgins, despite the fact that he claims to have basically created this present version of him. Either she has really changed, or she is simply very good at pretending to be noble and polite—but is there really any difference? At what point does pretending to be noble and polite become actually being noble and polite? And remember all the noble people who acted less polite than Eliza did at the party. Are they still more noble than she is simply because they have money? The play questions such attitudes, without coming to any definitive answer.
Eliza tells Pickering that she is grateful to him for teaching her proper manners, unlike Higgins, who set a bad example for her. She says that she grew up behaving just like Higgins, with a short temper and foul language. This infuriates Higgins, but Eliza keeps talking to Pickering, telling him that her real education began when he called her Miss Doolittle.
Despite his high-class upbringing, Higgins lacks proper manners, and actually set a bad example for the pupil he was supposedly teaching how to behave properly. Eliza reveals the power of language as she tells Pickering that his calling her Miss Doolittle—his verbal recognition that she could be someone who could be called Miss Doolittle—was what really spurred her realization that she could change and deserved the same respect a wealthy person takes for granted.
Eliza thanks Pickering for always treating her well, concluding that "the difference between a lady and a flower girl is not how she behaves, but how she's treated." Eliza says that she would like Higgins to call her Miss Doolittle, and Higgins curses.
Eliza's comment asserts that there is no inherent difference between the wealthy and the poor—the only difference is in whether other people grant them the respect they deserve. When formulated this way, a change in appearance (clothes and speech) does not change a person so much as give them access to the respect that should have already been granted to them, and perhaps to realize that they should be granted that respect. She demands this respect from Higgins. His curse is a rebuttal, but one can see this rebuttal not as a statement that Eliza doesn't deserve respect but that no one does given Higgins basic rudeness and misanthropy throughout the play.
Pickering tells Eliza to curse back at Higgins, but she says she cannot now. She says that she has forgotten her old way of speaking, like a child who is brought to a foreign country who forgets its native language when it learns a new one. This greatly upsets Higgins, who says that Eliza will return to her old way of life within weeks. Pickering asks her to forgive Higgins and come back to Higgins' home.
Higgins and Eliza disagree over whether she has really transformed her identity, or whether she has merely changed her speech and appearance and will return to her old ways. Pickering sides with her, but also wants her to forgive Higgins for not believing that she could have changed.
Mr. Doolittle sneaks up behind Eliza and surprises her. She cries out, "A-a-a-a-a-ah-ow-ooh!" just as she used to, and Higgins is delighted that she has relapsed into one of her old speech habits. Mr. Doolittle tells Eliza that he is marrying her stepmother, having been intimidated into it by middle class morality. He asks Eliza to come to the ceremony.
Moments after claiming she is a changed person unable to go back to speaking as she used to, the shock of seeing her father makes Eliza exclaim in the same kind of unladylike way she did before her transformation. This seems to support Higgins position that people don't change. Meanwhile, Mr. Doolittle is annoyed at being forced into a respectable marriage by the social norms and expectations of his new class.
Pickering encourages Eliza to go to the wedding. Eliza reluctantly agrees and leaves to get ready for the event. After Eliza has stepped out, Mr. Doolittle tells Pickering that he is nervous, because he has never been married before. He didn't marry Eliza's mother, because marriage isn't natural, but merely "the middle class way." Mrs. Higgins asks if she can come to the wedding, as well, and then leaves to get a carriage.
Mr. Doolittle continues to criticize Victorian social customs, claiming that he has been basically forced into marriage because of middle class expectations, and yet he finds himself unable to resist those norms. He is changed by them.
Eliza returns and Mr. Doolittle leaves to get to his wedding. Pickering asks Eliza to forgive Higgins and come back to live at Higgins' place, before following after Mr. Doolittle. When Eliza and Higgins are alone, he tells her to come back to him. She replies that he only wants her back so that she will pick up his things and do errands for him. Higgins says that if she comes back, he will not change his manners, as he can't change his nature.
Higgins stubbornly claims that he will not change his rude behavior because he cannot change his nature—even though he has spent most of the play changing Eliza's behavior.
Higgins explains to Eliza that he is rude to everyone, regardless of social class, whereas Pickering is polite to everyone, regardless of class. He tells her that it is important not to have good or bad manners, but to have the same manners toward all people. Eliza believes him, but still says that she can do without him.
Higgins finally offers an explanation for his rude behavior. He takes care to behave the same to everyone, regardless of class. This doesn't seem to be completely accurate though, when one considers how he behaved differently in the beginning of the play toward Eliza and Pickering.
Higgins says that he will miss Eliza if she leaves. He says he has grown fond of her. He tells her to come back to his home "for the sake of good fellowship." He says he never asked her to behave like his servant. Eliza says that he doesn't notice her.
Higgins finally shows some fondness for Eliza, rather than treating her as a lab rat. He claims that she took on the role of servant. But Eliza responds that it was his treatment of her—his lack of notice of her as a person—which pushed her into that position.
Higgins says that if she comes back, he will throw her out if she doesn't do everything he wants, but that she may leave and live with her father if he doesn't do everything she wants him to do. Eliza wishes that she were a simple flower-girl again, under the control of neither Higgins nor her father. She says, "I am a slave now, for all my fine clothes."
Higgins' odd proposal to Eliza indicates his idea of an equal relationship, in which two people do exactly as the other wants—two people in complete control of each other. In response, Eliza wishes she could go back to her simpler life as a flower girl and, like her father, is able to see that entering high society is not necessarily good and, especially for a woman, can be its own form of slavery.
Higgins offers to adopt Eliza, or marry her to Pickering. Eliza says she doesn't want this, as Pickering is too old and Freddy Eysnford Hill has been writing love letters to her anyway. She says that she has "a right to be loved," but Higgins asks whether Freddy can "make anything" of Eliza.
Higgins gives Eliza two options, both of which place her under the control of a man. Whereas she thinks of love when considering who she might marry, Higgins is only interested in what a potential husband can "make" of Eliza. He does not see her as capable of "making" anything of herself.
Eliza says she is not interested in anyone making anything of someone else, whereas that is all Higgins cares about. Higgins asks if Eliza wants him to care about her like Freddy does, but she says all she wants is some kindness from him, insisting to him that she is not "dirt under your feet."
Eliza demands to be treated as who she is, not as someone who needs to be made into anything else at all. Higgins wonders if she wants his love; she responds that she wants his kindness and his respect.
Higgins tells Eliza that if she can't deal with his coldness, she can leave and return to her "life of the gutter." Eliza calls him cruel and a bully. She says that she will marry Freddy. Higgins says that she will marry an ambassador or someone similar and says he doesn't want his "masterpiece thrown away on Freddy."
Higgins again asserts that without him she would go back to being a poor person. When she responds that she won't, that she'll marry Freddy, Higgins again manages to claim ownership of and credit for Eliza by saying Freddy isn't good enough for his "masterpiece."
Eliza responds that if she can't have kindness from Higgins, she'll have independence. She says she could become a teacher of phonetics, advertising that she could help others transform themselves just as she did. Higgins is suddenly impressed with Eliza's strength.
Eliza is fed up with being under the control of men, whether Higgins and Pickering, her father, or a potential husband. In saying she could become a teacher of phonetics she is making a claim for self-control based on her own knowledge, she is claiming what she has been taught as her own, of creating herself. Higgins is finally impressed with her cleverness and willingness to stand up to him and demand independence.
Just then, Mrs. Higgins returns and tells Eliza a carriage is ready to take them to her father's wedding. Mrs. Higgins says that Higgins is not coming to the wedding, because he can't behave himself in church. As Eliza leaves, he asks her to pick him up some groceries and clothes. She tells him to buy them himself. Eliza and Mrs. Higgins leave, and Higgins is confident that Eliza will buy the things for him, as he ordered.
Again, it is Eliza who has better manners than Higgins. But the truth is she has had better manners—in the sense of treating others with kindness and respect—than Higgins even before he began to train her. The play leaves Eliza's final status very ambiguous: has she finally broken free and become an independent woman or will she go back to Higgins? Has she truly transformed, will she relapse into her lower-class customs, or will she remain Higgins possession? The play questions the meaning and possibility of transformation without ever resolving the tensions it brings to the fore, just as it does not resolve Eliza's own situation.