Hamida recalls that her mystery man will be waiting for her on Darasa Street, but obstinately decides not to go out. Instead, she watches from her window as he arrives at Kirsha's café. While he looks up at her window, she realizes she is drawn to him.
The next day, she strolls to him at Darasa Street, and he grabs her hand when she passes him. Dismayed by the scandal this could cause, she forces him to let go. He finally reveals his name: Ibrahim Faraj. The intimacy excites Hamida, but also worries her. She tries to return home because it is getting late and Umm Hamida will worry, but her new suitor does something astonishing: he calls a taxi and leads her inside. She has never been in a taxi.
In the taxi, Ibrahim Faraj shows Hamida the wonders of the high life through the window, as they cruise areas of Cairo she has never seen. At one point, he kisses her. She resists, but only slightly. He indicates they are near his home, and he invites her to have a lemonade there. She reluctantly agrees, and is amazed at the high-rise building where he lives; its entrance is as wide as Midaq Alley.
Inside the apartment, she is dismayed to hear voices behind one of the closed doors. He leads her to a sofa in the living room, where he kisses her again. When Ibrahim Faraj tries to remove her cloak, she violently stops him. He apologizes profusely and continues to compliment her, which diffuses her indignation. With profuse declarations of love, he tells her she is better than Midaq Alley, and that she should move in with him. He suggests that her only fate in the alley would be old age and lots of thankless children. His declarations grow more intense until she realizes that he does not want to marry her - in fact, he is a pimp trying to recruit her. Angrily, she insists he take her back home.
They take a taxi together back to Midaq Alley, and as she exits the car, Ibrahim Faraj again declares his love for Hamida, as well as his belief that she will eventually return to him.
Umm Hamida has been worried about Hamida's whereabouts, but she quickly lies and calms her mother down. Umm Hamida then shares the news that Mrs. Saniya Afify is soon to be married.
That night, Hamida considers her choices, and decides there there is no longer room for Abbas in her life. She believes that marrying Abbas would leave her filthy, pregnant, and poor, just as Ibrahim Faraj has warned. Though she realizes the ripples it will cause in Midaq Alley, and the harm her reputation will suffer, she decides to accept the man's offer. However, she decides she will live this life on her terms, and not be subsumed to the will of Faraj.
The next day, Hamida leaves her flat for what she believes is the last time. She finds Ibrahim Faraj at his usual place, and he brings her back to the apartment. There, she refuses to sleep in bed with him, and he allows her to have the bedroom to herself. Then, he explains that he is not a pimp, but rather the headmaster of a school, ready to teach her everything.
Unexpectedly, Hussain Kirsha returns home, to his mother's delight. Even more unexpectedly, he brings with him a wife, Sayyida, and her brother, Abdu. Mrs. Kirsha is disappointed that she was not invited to the wedding, and even more upset to learn that Hussain has lost his job and needs to live with them.
Kirsha, having heard of Hussain's return, bursts in and angrily demands to know what happened. Hussain explains that many have been laid off because the war was coming to an end. Because he squandered his money on luxuries like running water and electricity, Hussain has saved nothing.
Kirsha initially wants to banish his son, but Mrs. Kirsha calms him down. Kirsha is further calmed when he sees Abdu, and is attracted to the young man. Finally, he gives his permission for the young people to stay with them.
Meanwhile, the news of Hamida's disappearance has reached the Hussain home, and Mrs. Kirsha tells Hussain about it. She doubts that the girl is actually in trouble, but has a hunch that Hamida ran off after being seduced.
Hamida is introduced to her new life. Ibrahim Faraj gives her new clothes, lovely perfume, and a new name, Titi, telling her she must forget everything of the past. He then introduces her to the classes she will be taking to prepare herself for men. At Oriental dancing, she meets Susu, the effeminate dance instructor, and some of the other 'students.' Next is the department of Western Dancing, a room where girls dance together to strange music. In another room, half-naked girls learn English phrases about the body.
Faraj remains calm and sweet with Hamida, insisting she only must learn what she wants. He continues to flatter her, claiming he loves her, and that she is superior to all the other girls. When they begin to grow intimate, he stops her, pointing out that soldiers will pay top dollar for her virginity. Infuriated, she attacks him, and their struggle soon dissolves into passion.
Late one night, Zaita bumps into Dr. Booshy while making his rounds. Dr. Booshy has news - a man with a full set of gold teeth has recently died, and Dr. Booshy knows where he is buried. They decide to go to the grave, and it becomes clear that they rob graves for valuables.
At Nasr Gate, Dr. Booshy leads Zaita to the fresh grave, and Zaita digs it up. They climb into the tomb, but only Zaita climbs all the way; Dr. Booshy is unsettled by it. When he reaches the corpse, Zaita removes its gold teeth. Moments later, they are ordered out of the tomb by a policeman.
The next morning, the alley inhabitants learn of the arrest, and realize how Dr. Booshy was able to provide such cheap teeth. Mrs. Saniya Afify rips her gold teeth from her mouth and faints, prompting her new husband out of the bath to help her.
One day, Uncle Kamil is woken from his nap by Abbas, who has returned to Midaq Alley during a short vacation from the army. Abbas looks smart and fit, and speaks in English. Uncle Kamil shares the alley's gossip, but does not know how to break the news of Hamida's disappearance.
Abbas shows Uncle Kamil a necklace he has bought Hamida as a wedding present, and admits he plans to marry her during this vacation. Uncle Kamil's troubled reaction leads him to tell the truth, which first quietens Abbas and then forces him into a rage wherein he blames everyone in the alley for abandoning her. Moments later, he breaks down, weeping in Uncle Kamil's embrace.
Abbas does not allow himself to consider the possibility that Hamida left by choice. He is depressed for a few days, and then finally asks the factory girls about his beloved. They tell him about the well-dressed man in the suit with whom Hamida was seen, and Abbas becomes incensed. His despair turns to anger, and he begins to yearn for revenge.
Though the inhabitants of Midaq Alley have always faced troubles and conflicts, the early sections of the novel have a somewhat whimsical and comical air. In these chapters, their lives grow significantly darker, as all of their ambitions and dreams collide with reality.
The most clear example of this is Hamida, who can realize her deepest dreams only through grievous compromise. It is important to remember how strict expectations were of women in this Islamic society. Not only would it be considered improper for a woman to walk alone with a man in public, but she could in fact see her marriage prospects ruined. For a poor girl, such a fate would mean a lifetime of poverty or shame.
The truth is, Hamida's shame is nowhere near as strong as her ambition. Though she reacts indignantly to Ibrahim Faraj's initial propositions, the narrator makes clear that these reactions are as much an expression of pride as morality. She is not only willing to trade her sexuality for wealth, but in fact is also willing to destroy her past. She sees in Faraj's system a chance to change her name and personality, through education specifically designed to appeal to rich foreigners. Of course, she has always had delusions of grandeur for which this spectacle directly allows.
For all her inner strength though, Hamida remains naive and simple. She resists any idea that her body is simply a commodity, and is assuaged only by Faraj's overly-romantic professions of love. In fact, she hangs on to a ridiculous conception of marriage, even though he barely makes any effort to encourage such a delusion. It is the only way she can maintain an illusion of agency, when she has in fact been bested. Faraj succeeds in overtaking her by flattering her, which the narrator makes clear is only a tactic he uses because he assumes her simplicity. Mahfouz is not judging Hamida for her simplicity, but rather showing how innocence is so easily compromised when faced with poverty and despair. Hamida's story becomes a cautionary tale even before she leaves Midaq Alley, because the reader knows that Ibrahim Faraj only sees in her a potential profit. The tragedy is that she cannot see that herself.
This broader theme of the downside of blind ambition resonates throughout this section. Hussain Kirsha left Midaq Alley in a dramatic huff of intended independence, only to return with a wife and brother-in law in tow, more broke than when he left. In his unwavering belief in Hitler's power, Hussain Kirsha refused to think about what would happen if Hitler was defeated. Now, he faces the folly of his short-sightedness, as he crawls back home to live with his parents. All the while, he maintains a sense of arrogant entitlement, the same attitude that encouraged him to leave and now only serves as reminder of how little potential he actually has.
And obviously, Abbas's blind ambition - to become wealthy - has blown up in his face. Ironically, his ambition was never great; he was going out into the world to realize Hamida's ambition. His good intentions matter little when he realizes the lengths to which people will go in pursuit of what they deem happiness. Nobody has a more drastic awakening than Abbas does. His faith and love persist even as he comes to terms with Hamida's absence. However, he ultimately realizes the truth - that she has selfishly pursued her own fulfillment with no thought to him - and the consequence is immediate and harsh. All of his good-will (recall how he was always previously described as harmless and kind) is replaced by rage and a desire for revenge. In the same way that Ibrahim Faraj has corrupted Hamida, Hamida has corrupted Abbas.
Overall, Mahfouz implies that these characters' golden dreams accomplish little against a stormy reality. One can see Mrs. Saniya Afify's golden teeth as a metaphor for this idea. Everyone in the alley takes Dr. Booshy's discounted gold plates without questioning their value, and even the wealthy but miserly Mrs. Afify took advantage of it. When she launches the teeth from her mouth, it serves as manifestation of the way many characters must rid themselves of delusions when the truth of the world emerges.
Most of the good-will and strong relationships are absent in this section, though a few moments remind us that there is real emotion in any relationship. Consider that between Abbas and Uncle Kamil, who weep together as brothers over the former's heartbreak. Umm Hamida is genuinely shaken by her daughter's disappearance, despite their constant animosity. Mrs. Saniya Afify, who started the novel alone, now has a husband who comes to her rescue when she is in trouble. Finally, the dysfunctional Kirsha couple ultimately bonds to realize their duty by allowing Hussain to stay. What these moments remind us is that family ties are deep precisely because they reflect honesty and history, between people who see us for who we truly are. Ibrahim Faraj tells Hamida that she is now part of his family, but what he offers is an imitation of a true family bond, an imitation precisely because it favors pleasant spectacle over truth. Even in these dark chapters, the integrity of Midaq Alley is expressed through its honesty; these people know both the vices and virtues of each other, and yet find a way to get along anyway.