The play now goes back two years to the time when the Governor was beheaded by his brother the Fat Prince. A scrivener named Azdak finds a fugitive and agrees to protect the man. He takes the man back to his hut. The man promises to pay Azdak 100,000 piasters for a night's lodging. When Shauwa, a policeman, arrives and demands that Azdak give him the fugitive, Azdak slams the door in his face and makes him leave. The fugitive takes off the next morning.
Azdak, realizing that he has given shelter to the Grand Duke, goes and makes Shauwa arrest him. He then drags Shauwa into the city and denounces himself, informing everyone that he protected the Grand Duke and therefore must be killed. The soldiers think that he is a fool and refuse to believe him. When he asks for the judge, they show him that the judge has just been hung. Azdak then sings a song for the Ironshirts, but the song is about the injustice of war.
The Fat Prince arrives with his nephew. He is planning on appointing his nephew to be the new judge. However, because his power is not yet solidified, he offers to allow the soldiers to choose the next judge, thinking that they will obviously choose his nephew. They do a mock trial in which the nephew pretends to be the judge and Azdak pretends to be the Grand Duke. When accused of running a war badly, Azdak blames the princes rather than himself. This implicates the Fat Prince as well. Azdak continues to speak the truth, much to the delight of the Ironshirts, but he eventually causes the Fat Prince to demand that they hang him. Instead, the Ironshirts make Azdak the new judge.
Azdak next proceeds to give judgment on four very unusual cases. He begins all his cases by saying, "I accept," meaning that he is willing to be bribed. The first case is between an invalid and a doctor. The Invalid claims that he paid for the Doctor to study medicine and that he then had a stroke when he heard that the Doctor was practicing for free. He blames the stroke on the Doctor and wants to be paid back the money he spent in getting the Doctor trained. The other case is that of a Blackmailer who demanded money from a landowner who had raped his [the landowner's] niece. However, the Blackmailer refuses to divulge the name of the landowner. Azdak rules that the Invalid must pay 1000 piasters as a fine, but that the doctor must treat him for free if he suffers a second stroke. The Blackmailer is required to pay the court half of his blackmailing fees since he would not give the landowner's name. Azdak then advises the Blackmailer to study medicine.
The next case is that of an Innkeeper who is bringing suit against his stableman, whom he claims raped his daughter-in-law, Ludovica. The Innkeeper claims to have caught the stableman in the act. Azdak tries to get a bribe from the Innkeeper by asking for a "little roan," but the Innkeeper refuses to pay him. Azdak then has Shauwa drop and knife which he makes Ludovica pick up. He watches as her hips sway. He then says, "The rape is now proven...you have raped that unfortunate man." Azdak then fines the Innkeeper the little roan that he wanted and lastly takes Ludovica to the stables on the pretext of investigating the scene of the crime.
The last case is that of Granny, an old peasant woman who has had several miracles occur. She claims that she miraculously was given a cow, that she had a ham fly into her house through a window, and that her landlord waived her rent. Three farmers are also present, each claiming that Granny's brother-in-law Irakli has stolen a cow, stolen a ham, and killed the landlord's cattle until the rent was waived. Azdak rules in Granny's favor, and fines the farmers for not believing in miracles. He then has wine with Granny and her brother-in-law.
After two years the Grand Duke returns to power and Azdak fears for his life. He tells Shauwa that the rich and powerful want to kill him because he has always ruled in favor of the poor people. The Governor's wife soon arrives and demands to have her child back. Azdak promises to oblige her, bowing all the while.
The amounts of money become much larger in this act than before. This is purposefully done by Brecht to show the difference in the levels of wealth between the various social classes. Because of these differences in wealth, Azdak becomes a "Robin Hood" figure, taking from the rich and giving to the poor. Thus, he fines the rich Invalid, the Blackmailer, the Innkeeper, and the Farmers, all of whom have wealth or land.
Another sacrament that appears in this act is that of Penance. Azdak is primarily a truth figure, and thus the Penance serves as a representation of his telling the truth. The brilliance behind his confession is the way he does it: all the soldiers ignore him and think that he is a fool. Even when he sings them a song against war, he gets away with it by claiming the song was taught to him by his grandfather. And in front of the Fat Prince, Azdak directly blames the war on the princes, but again instead of being punished he is rewarded. His truthfulness is revealed through the way he takes bribes; he is bribed publicly so that all can see rather than secretly.
The last sacrament of the Eucharist, or the Holy Supper, also appears in this act. Azdak shares wine with Granny and Irakli. The Singer comments that "Broken law like bread he gave them." This is almost a direct comparison of Azdak to Christ. Brecht will continue this comparison in the next act, when Azdak is "killed", "resurrected" by the Grand Duke, and finally disappears.
Like Grusha, Azdak goes through ten developmental steps as well. A quick list is given here: first, he protects the Grand Duke, second he denounces himself, third he is made the judge, fourth he judges the case of the Doctor and the Invalid, fifth he judges the case of the Blackmailer, sixth he judges the case of the Innkeeper, and seven he judges the case of Granny and the miracles. The remaining three stages of development occur in the final act.