On their way back to the castle, Manfred worries about what he is convinced is a love affair between Isabella and Theodore, but he nevertheless resolves to gain Isabella for himself. He uses every possible argument to convince Hippolita to divorce, only to find that Hippolita readily, though passively, agrees to go through with it. Manfred decides to use Matilda as a bargaining chip to convince Frederic to give him Isabella.
Hippolita’s easy agreement to a divorce is both a sign of her wifely submission and of her earlier belief that it will somehow allow her to sacrifice herself to prevent an unspecified disaster for her family. Manfred’s decision to use his daughter for his own gains is evidence of a patriarchal society, a system in which women are objectified and exploited by men.
Delighted with his wife’s response, he quickly leaves to inform Frederic. On the way back to Frederic, though, he meets Bianca. Knowing that Bianca is Isabella’s and Matilda’s confidante, he tries to ascertain the exact nature of Isabella’s and Theodore’s relationship. However, after a long, rambling, and unsatisfactory response from Bianca, Manfred knows little more than he did before. Still, he bribes Bianca with a jewel to spy on Isabella.
Like Jaquez and Diego in Chapter 1, and unlike the novel’s noble characters, Bianca rambles inarticulately when responding to Manfred’s questions. Her acceptance of Manfred’s bribe contrasts with Jerome’s earlier rejection of a bribe from Manfred, showing that she, as a peasant, is represented as morally inferior to the story’s nobles.
Manfred finally reaches Frederic, but just as he is about to tell Frederic his good news, Bianca bursts in. She is terrified, and in her terror she tells Manfred that as she was going to do her spying she was scared away from Isabella’s quarters by the sight of a giant hand in armor.
Manfred’s plans are again thwarted by the supernatural. The appearance of this divine intervention as a giant hand evokes the “hand of God,” a pointedly over-the-top message that Manfred’s actions will not be tolerated by the forces of heaven.
Frederic, having learned of Manfred’s treacherous spying, now decides not to go through with the double wedding. Manfred, however, tries to sway him by praising his daughter’s beauty. Frederic remains tempted by the thought of Matilda, and even more so by the power of ruling Otranto. And yet, he still wavers in his decision, and decides to see if Hippolita truly consented. At that moment, however, an announcement is made that a banquet has been prepared, and Manfred, still hopeful that he can convince Frederic, tries to manipulate him by seating him next to Matilda at the feast and by getting him drunk.
Despite learning of Manfred’s deceit, Frederic is still tempted by worldly desire and power. Manfred’s attempts to sway him further reveal the gender structures of marriage and power in a patriarchal society. By using his daughter’s appearance to tempt Frederic, Manfred appropriates his daughter’s body to facilitate an exchange for political rule. Matilda’s and Isabella’s bodies are currency to these men, both of whom believe that by disposing of their daughters through marriage, they will gain Otranto.
Once the banquet is over, Frederic desires Matilda more than ever and goes to see Hippolita in her oratory in order to confirm her consent. At the oratory, Frederic finds a mysterious cloaked figure kneeling in prayer. However, when he approaches the figure he discovers that it is not Hippolita as he thought, but a skeleton in a hermit’s cowl – it is the ghost of the hermit he met in Joppa. The ghost scolds him for subordinating his mission to save his daughter below his own carnal desires and orders him to forget Matilda. Torn between “penitence and passion,” Frederic falls in agony to the floor and prays to the saints. Hippolita then arrives to find his motionless body on the floor, and thinking he is dead, screams out. The noise brings Frederic back to his senses, and he exits the room tearfully, hinting at his love for Matilda but leaving Hippolita with little explanation. Heading for his own room, he runs into Manfred, who wants to celebrate with him. But Frederic, still shaken by the apparition, brushes off the drunk and irritable Manfred, who had just been rejected once again by Isabella.
Persuaded by Manfred’s temptations, Frederic succumbs to his worldly desires and is stopped only by the ghost’s reminder that Frederic’s mission was not to hand Isabella over to Manfred but rather to save her from Manfred. Another example of divine intervention in the novel, the appearance of a ghost is also a common feature of Gothic literature. It is worth noting that despite Frederic’s temptation for power and lust, the appearance of the ghost does shift him to a new path. This stands in stark contrast to Manfred, who despite being thwarted by the supernatural multiple times, never ceases to focus on his worldly desires. While Theodore serves as a contrast to Manfred by displaying constant nobility to Manfred’s constant ignobility, Frederic offers a different kind of contrast: he is similar to Manfred, but his example shows that even one such as he can give himself to heaven rather than pursue only his own worldly desires.
Furious at these rejections, Manfred becomes all the more enraged when his spy at the church informs him that Theodore and a lady are secretly meeting at Alfonso’s tomb in the church. Believing that Isabella rejected his sexual advances because of her eagerness to meet Theodore, Manfred decides to spy on them himself. Guided by faint moonlight from the church windows, Manfred is able to sneak up behind the couple undetected. When he hears the couple discuss getting married, his fury rises and he stabs the woman from behind, believing that it is Isabella. However, it is not Isabella but Matilda, his own daughter. Realizing his mistake, Manfred tries to kill himself but is stopped by a few monks, who were drawn to the commotion. Though the monks try to help her, Matilda urges them to help her father instead and insists that she be brought to her mother in the castle.
Manfred’s stabbing of Matilda fulfills Jerome’s previous warning about her fated destruction. Just as moonlight distracted Manfred from Isabella’s initial escape, here it guides Manfred to the murder of his own daughter, suggesting that like Conrad’s death by a giant helmet, her death also occurred by divine will. Also note how, earlier in the book, at different times Manfred couldn’t recognize Matilda or Isabella. Here he again fails to recognize them, mistaking them for each other, to deadly result. There is a suggestion here that treating women like objects has made Manfred blind in a way that dooms him. Only now that he has killed his daughter does Manfred finally begin to feel real remorse for his actions.
The monks and Theodore are bringing Matilda to the castle, with Manfred following behind in despair. Hippolita, who had heard the news, rushes toward the church to find her daughter but faints halfway there and is revived by Isabella and Frederic. In a gesture of daughterly devotion, Matilda clasps the hands of both her mother and her father to her heart, and a remorseful Manfred throws himself on the ground, cursing himself. Worried that Manfred’s and Hippolita’s emotions will overwhelm Matilda, Isabella takes charge, ordering Manfred to his apartment. She also has Matilda brought to the nearest room in the castle. Though Theodore tries to marry her before she dies, Matilda focuses almost entirely on her mother, forgives her now absent father for killing her, and dies shortly thereafter.
Even on her deathbed, Matilda clings to her filial duty, forgiving her father for killing her. Despite her newfound love for Theodore, Matilda pays more attention to her mother than to him, privileging her love for her mother over romantic love. Isabella’s clear-headed decision to take charge of the situation foreshadows her later position as Theodore’s wife and princess of the castle.
As Theodore mourns over the body, Isabella is walking Hippolita back to her room, when they meet Manfred in the court. Manfred, who was on his way to see Matilda, realizes that his daughter is dead, and at that moment, the earth rocks and the giant helmet clamors. Believing the end of days is here, Frederic and Jerome rush out to the court, dragging Theodore behind them. As soon as Theodore steps out, part of the castle walls behind Manfred crash down, and a giant ghost-like image of Alfonso appears over the ruins, declaring that Theodore is the true ruler of Otranto.
That the castle walls fall only behind Manfred suggests that his power as ruler has now fallen apart. The appearance of the giant ghost in the ruins’ place signals Manfred’s replacement as ruler of the castle by Alfonso’s heir, Theodore, and fulfills the prophecy about the rightful owner of the castle having “grown too large to inhabit it.”
Everyone in the court falls to the ground in recognition of the “divine will.” Hippolita decries “the vanity of human greatness” and declares to Manfred that only retiring to the church’s convents will save them. Grief-stricken for his daughter’s death, Manfred repents for his crimes and is finally ready to listen to Hippolita. In order to atone, he confesses to killing his daughter in the church and reveals the story of how he came to rule Otranto. His grandfather Ricardo had been Alfonso’s chamberlain and, during the Crusades, murdered Alfonso and then forged Alfonso’s will in order to gain power. Returning to Otranto, Ricardo’s ship was wrecked in a storm, and Ricardo then made a deal with St. Nicholas ensuring his survival and rule over Otranto in return for building a church and two convents dedicated to the saint. St. Nicholas accepted, but also decreed that Ricardo’s line would rule only until the rightful ruler grew too large to inhabit the castle.
For the first time in the novel, Hippolita criticizes her husband for his pride in worldly power rather than his humility for divine power. Manfred’s readiness to repent and to listen to his wife is a marked change from his previous impiety and misogynistic attitudes. His revelation that his grandfather had both murdered the rightful ruler of Otranto and forged a will to obtain power for himself further confirms Jerome’s declaration that a tyrant’s third and fourth generations will be destroyed. Both Matilda and Conrad (the fourth generation) were killed; however, Manfred (the third generation) is able to escape destruction by praying to St. Nicholas, recalling Walpole’s earlier criticism in his first preface about “Muralto’s” conflicting moral lessons.
Jerome then completes the story by recounting Alfonso’s secret past. Before Alfonso fought in the crusades, he married a Sicilian woman named Victoria, who gave birth to a baby girl who eventually became Jerome’s wife. This means that Theodore is a direct descendant of Alfonso. In atonement for his sins, Manfred abdicates the throne and retires to one of the nearby convents to become a monk, while Hippolita retires to the other convent to become a nun. Frederic relinquishes his own claim to Otranto, and offers Theodore Isabella’s hand in marriage. Because Theodore is still in mourning for Matilda, he is reluctant at first, but after bonding with Isabella over their shared loss, he eventually decides to marry her.
After Theodore’s right to rule is declared by the ghost of Alfonso, Jerome reaffirms this right by confirming his son’s bloodline, suggesting that both noble blood and divine will are necessary for “legitimate” rule, evoking the medieval concept of the doctrine of the divine right of kings, in which kings ruled because it was the will of God that they hold the throne. Because of the ghost’s declaration, Manfred, Hippolita, and Frederic finally overcome their worldly desires. Theodore’s marriage to Isabella unites two families’ claims to the throne. As the only surviving and successful marriage in the novel, Theodore’s and Isabella’s marriage is founded not on romantic love, as was Theodore’s relationship with Matilda, but rather on companionship.