Crammed together in the wardrobe, the children inch backwards, and are soon surrounded by something cold and wet. Peter and Susan comment on the new sensations, but Edmund suggests that they get out of the wardrobe, since the tour group has passed them by. Suddenly, Susan notices that she is leaning against a tree, and they all realize that they are standing in a forest. Peter apologizes to Lucy for having doubted her, and acknowledges that "Lucy's wood" is, in fact, real. Characteristically, he expresses a desire to explore, but the level-headed Susan suggests that they reach back into the wardrobe for the fur coats, to protect them against the cold weather. Lewis writes that they look "more like royal robes than coats," foreshadowing the siblings' eventual ascension to the four thrones at Cair Paravel.
The ecstatic Lucy suggests that they all pretend to be Arctic explorers, but Peter responds that it isn't necessary to pretend in a place like Narnia. Edmund, forgetting that he had told Peter and Susan that he and Lucy had merely been pretending to be in Narnia, suggests that they head for the lamp-post. Peter and Susan immediately realize that Edmund has been lying to them. Peter is especially angry with his brother for having made them doubt Lucy. Edmund follows his siblings towards the lamp-post, grumbling to himself that he will make them all pay.
Lucy, having been designated the leader of the group by Peter, suggests that they visit her friend, Mr. Tumnus. When they arrive at his cave, however, they discover that the door has been broken off of its hinges, and the cave has been destroyed. There is a notice nailed into the carpeting declaring that Mr. Tumnus has been arrested for High Treason against "her Imperial Majesty Jadis, the Queen of Narnia, Chatelaine of Cair Paravel, Empress of the Lone Islands, etc." The notice is signed by Fenris Ulf, Captain of the Secret Police. Lucy is upset by the notice, and explains to the others that the "Queen" is actually the White Witch, the one who has made it always winter and never Christmas.
Lucy feels responsible for Mr. Tumnus's arrest, and the children try to devise a plan to save him. Edmund complains that there is little they can do, and, besides, he is hungry. Peter tells Edmund to hush up, and suggests that they try to figure out where Mr. Tumnus has been taken. He is also worried about the lack of food, but feels that they should move forward nonetheless. Lucy notices a red-breasted robin, and when she asks it where they should go, it hops from tree to tree to signal that they should follow. Edmund suggests to Peter that the robin might be setting a trap, but Peter says that robins are usually good birds in stories. Edmund then asks how they can be sure that Mr. Tumnus is a good faun, and that the "Queen" is evil? Peter responds that they can be sure that Mr. Tumnus is good because he saved Lucy, but Edmund suggests that the faun may have merely been pretending to save her.
As all four children stand together in Narnia for the first time and it becomes clear that Edmund has been lying about not having been there before, the rift between the brothers worsens. Peter, the eldest, has already lectured Edmund for tormenting his sister, and he now calls him "a poisonous beast." Peter is clearly the leader of the group: he is responsible, thoughtful, and well-liked by his siblings. Edmund, on the other hand, is a mean-spirited boy, always picking on his little sister and the other children at school. When Peter criticizes him, Edmund reacts with barely-disguised hatred. It is partly Edmund's hatred for Peter that leads him to betray his siblings. Indeed, Edmund's hunger for revenge and tyrannical personality are reminiscent of the White Witch herself.
In this chapter, the White Witch is revealed as a cruel, illegitimate ruler. Lewis never directly explains how she has come to power, but states that her rule has upset the balance of the seasons. She is a creature of the wintertime, and imposes the hostile environment in which she is most comfortable on all of the forest creatures. The notice nailed into the carpet in Mr. Tumnus's cave also implies the existence of a Secret Police, which is a lightly-veiled reference to the German Secret Police that inspired such terror during World War II. The White Witch maintains control over Narnia largely by harnessing the fear that she inspires in others.
Edmund's natural skepticism is revealed when he questions whether the robin and Mr. Tumnus are "good", although he is quick to assume that the White Witch is benevolent because she has provided him with Turkish Delight and has promised him power. Peter counters Edmund's skepticism by exercising the logic he has learned from the Professor. He deduces that the door to Narnia is most likely not a constant one, and suggests that they should not count on being able to return for food. Next, he concludes that Mr. Tumnus is a good faun because he saved Lucy from the clutches of the White Witch. Furthermore, he deducts that the White Witch must be evil, because she has declared it a serious crime to be friends with human beings. Peter also concludes that the red-breasted robin must be a friend because stories usually depict robins as "good". This is another example of Peter's use of logic: he makes decisions based on his past experiences. Lewis appears to be hinting that kernels of pure truth often lie at the heart of fairy tales and myths, thereby lending credence to his own whimsical story.