As Panza debates whether he should return home, he and Quixote meet a duke and duchess in the woods. The couple is out hunting together, and after Panza approaches, the duchess reveals she has read the book about Quixote. The duke and duchess decide to treat Quixote according to the chivalric ideas he espoused in the book. In his hurry to help Quixote dismount, Panza gets tangled in his stirrup and ends up stuck upside down hanging from his horse. Quixote, believing Panza was ready to help him, falls from his horse and pulls the saddle off with him. Quixote, however, is so enamored of the duke that he shakes off the incident and agrees to follow the couple to the nearby castle. 

Quixote appreciates the way the duke and duchess treat him. He takes their polite behavior as an indication he is finally a real knight. Panza is initially happy with the course of events. When a servant at the castle refuses to care for his donkey, however, he becomes annoyed. He shouts at the maidservant, and the two spend some time arguing. At dinner, Quixote is told to sit at the head of the table. Quixote and Panza amuse the duke and duchess with their conversation and their stories.