In bed that night, Rosemary lies awake and then begins to dream. She thinks about Terry's body being covered in a white cloth, and imagines a nun speaking angrily in Mrs. Castevet's voice. In this space, a priest, two nuns, and various masons and schoolchildren are gathered around. As masons fill the windows with bricks, one nun is berating the other, named Sister Veronica. The priest turns to Rosemary, who from her bed whispers a confession to the priest that she "told Sister Veronica about the windows and she withdrew the school from the competition."
The dream ends when Mrs. Castevet buzzes at the front door, paying Rosemary a visit to thank her for her kindness on the night Terry died. She asks if Rosemary has any children and compliments her on her apartment. When Rosemary tells Mrs. Castevet she and Guy plan to have a child soon, Mrs. Castavet congratulates her and encourages her to have multiple children. Rosemary tells Mrs. Castavet about her husband's success as an actor, and Mrs. Castavet invites Rosemary and Guy for a steak supper. Rosemary initially refuses but relents upon hearing it will be the couples' first meal alone without Terry.
Guy returns home after learning another actor named Donald Baumgart received the role he was up for. Rosemary serves him beer and a sandwich, and tries to console him. She mentions Mrs. Castevet's invitation, but expresses shock at Ms. Castevet's nosiness in general. Guy is reluctant to go, not wanting to become overly familiar with nosy, elderly neighbors, and though Rosemary understands and agrees, the two decide they will accept their invitation this one time.
In the Castevets' apartment, Mr. Castevet serves pre-dinner cocktails and spills liquor on the carpet, which Mrs. Castevet hastily cleans up. We learn Rosemary is from Omaha, Guy is from Baltimore, and Mr. Castevet is from New York City, though he says he has traveled "literally everywhere" since he was a child. As they eat their steak dinner, Mr. Castevet mentions that the Pope doesn't visit cities where newspaper workers are on strike, and that all religions are mere "showbiz." Mrs. Castevet senses this remark makes Rosemary, a Catholic, uncomfortable, but Mr. Castevet insists that the Pope's title does not make him inherently worthy of respect.
Mr. Castevet mentions that the theme of the "hypocrisy of organized religion" was memorably examined in John Osborne's 1961 play Luther, for which he mistakes Guy for the main understudy. Guy explains he played a different, smaller role. Over cake, Mr. Castevet compliments Guy's acting ability and mentions that he grew up in the theater world, as his father was an established theatrical producer. Mr. Castevet assures Guy that he has an "inner quality" that will help him go far in his career.
Cleaning up, Rosemary tells Mrs. Castevet she's a "country girl" at heart, and that her sisters each have multiple children. When Mrs. Castevet implies that Rosemary will probably have several children as well, Rosemary replies, "Oh, we're fertile alright. I've got sixteen nieces and nephews." Rosemary looks into the living room and notices a big, clean square on the wall where it looks like a large picture should be hanging.
After insisting to be called by their first names (Roman and Minnie), Mr. and Mrs. Castevet say goodnight to Rosemary and Guy, who later share their bemusement over the dinner with each other. Rosemary asks Guy how he was able to eat that heavy cake, and expresses her surprise that they own so much beautiful silver but only three matching plates. Despite joining Rosemary in mocking the Castevets, Guy casually mentions that he made plans to hear more of Roman's stories about the New York theater scene the following day. He invites Rosemary along, but she declines. She mentions that several pictures on the walls of the Castevets' apartment seem to have been taken down, and the only picture hanging didn't fit.
Rosemary's first dream sequence is a pivotal omen about later events in the film. In it, Polanski's cinematic aesthetic deliberately jars the viewer by seamlessly combining real and dreamed surfaces within a single frame. Being able to distinguish reality accurately from dream and/or performance is one of the film's key themes, eventually brought to a horrifying climax in Rosemary's next nightmare. Flowers, which symbolize Rosemary's innocence, are visible in the yellow floral wallpaper above her bed, and fade as she begins to dream into a red-tinted image of Terry's corpse, tracing the sinister trajectory that the plot will soon take.
Mrs. Castevet's voice, heard through the wall, becomes in Rosemary's dream the voice of Sister Agnes, a nun at her old Catholic school. The window Terry Gionoffrio shattered becomes a feature in Rosemary's dream-space, which the original script describes as, "a composite of Our Lady's School, Uncle Mike's Body Shop, and the candy counter in the Orpheum Cinema." The fact that the first dream scene combines a Catholic school with an "Orpheum Cinema" symbolizes the film's theme of religion-as-performance, and foreshadows Roman's remarks over dinner that all religions are mere "showbiz."
Although Mrs. Castevet is clearly castigating Roman for telling Terry about the coven too soon, a delirious Rosemary instead imagines a nun berating her for the broken window. Her tearful confession to a priest named Uncle Mike characterizes her as a woman who has been conditioned to react to confusion, accusation, and fear with deference, obedience, and apology. The dream foregrounds the fact that these personality traits are bound up with Rosemary's Catholic upbringing. Uncle Mike (in the dream-space above Rosemary's bed) and Rosemary (seemingly lying awake in bed) share the frame together and can communicate, seamlessly blending fantasy and reality in the mise-en-scene.
Minnie's arrival signals the end of the dream. The point-of-view shot of her through the peephole is one of the film's most iconic images: she is stone-faced, lips pursed, not knowing she is being watched, and thus under no pressure to "perform." Once Rosemary invites her in, she is warm, talkative, and engaged. Polanski and Levin, both men from Jewish backgrounds, were likely well aware of the antisemitic Christian myths surrounding "blood libel"—the idea that that Jews murdered Christian babies during high holidays. Although never formally announced as such, Minnie's personality is consistent with cultural stereotypes of Jewish New Yorkers—she is forward, nosy, and money-minded. Rosemary, a Catholic "country girl" from the midwest, is shocked to find "she actually asks the prices of things!"
Despite their misgivings, Rosemary and Guy have dinner with the Castevets', a scene that contains several pivotal clues. Wearing a red sweater, Mr. Castevet serves a blood-red drink called "Vodka Blush," spilling some on the carpet. The Castevets then serve a thick steak, a clear symbol of flesh sacrifice and cannibalism. Rosemary notices paintings are missing from the wall, another symbol of secrecy/concealment. Their dinner conversation continues to develop the film's theme of religion as performance, and performance as religion: Roman mocks the "costumes" and "rituals" of organized religion as merely showbiz, and lavishes praise on Guy's ability as an actor to conjure "authenticity." This discussion foreshadows the fact that the Castevets/Marcatos—a family embedded in the history of New York's theater scene—are in fact members of a global coven syndicate.