Stephen continues to see prostitutes, and enters a period of deep confusion and spiritual paralysis. He considers his actions to be terribly sinful, but he becomes strangely indifferent toward the idea of eternal damnation. He continues his studies and his duties in the society of the Blessed Virgin, strangely numb towards his own hypocrisy. He finds himself an altogether less pleasant person, as if his violation of one rule has led to a complete loss of self-control; although he began with Lust, he lately finds himself tainted by all of the Seven Deadly Sins. St. Francis Xavier's Feast Day approaches, and every year for three days before the feast day the boys of Belvedere have a spiritual retreat.
On each of the three days of the retreat, Stephen hears a fiery sermon on the torments of hell and the punishments meted out by the just but stern God. The first day's sermon is on the inevitability of judgment. God, who gave many opportunities for repentance during life, will be transformed from God the Merciful to God the Just. Stephen is made sick with fear; the sermons seem as though they were written specifically for him. He thinks about his sins, and is too fearful to confess to God, who seems too fearsome, or the Blessed Virgin, who seems too pure. He imagines being brought back to God through Emma, the girl to whom he tried to write a poem. She seems approachable enough. The second day's sermon is on the incredible physical torment of hell. Stephen feels that he must confess, but he is too ashamed to do so. The third day's sermon elaborates on hell's tortures, the greatest of which is being cut off from God. That night, Stephen has terrible nightmares about hell; the dreams are so intense that he wakes and vomits. He searches for a church where he can go and make his confession with true anonymity. He finally finds one, and he confesses all. The world seems born anew when he steps out of the church. He resolves to live a new life of piety.
All of Chapter 3 deals with the results of Stephen's first rebellion against Catholic values. At first, he enters a state of moral paralysis and confusion. Having broken one rule, he seems to lose the ability to maintain any kind of moral structure or self-discipline. His deep unrest manifests itself as a general souring of his whole personality. His situation is difficult. He is indulging in the pleasures of the flesh for the first time, but he soon learns that to abandon the moral order in which one was raised is no easy thing.
Stephen will eventually prove to be too independent a thinker for Catholic doctrine. His love for beauty and for the particular pleasures offered by the human body do not necessarily mean that he is destined for a life of carnal decadence; even before he is terrified by Father Arnall's sermons, his period of whoring brings much discontent and restlessness. This period foreshadows difficulties he will have later on: if and when he rejects the Catholic Church and its teachings, he will have to find a new ethical system on his own.
His sense of being lost makes it possible for Father Arnall's sermons to bring him back to the Church. The sermons are very well written, and are a famous part of the novel. Full of vivid imagery and sensual description, they prey perfectly on Stephen's active imagination and sensitive nature. He is unable, at this point, to assert his independence from the religion in which he has been raised. Fear drives him back. The themes of independence and entrapment by Ireland are central to Chapter 3. We see Stephen's first revolt, and his subsequent repentance and return.