It has been two weeks since the narrator and John have moved into the house, and she has not felt like writing since the first day. John is away during the day on cases, even at night sometimes, and the narrator is extremely lonely. She blames John for not understanding how much she suffers and longs for his support. Still, she believes that she is suffering from nothing more than mere nervousness, and she does not want to be a burden to John.
She is too tired to do anything on her own and feels an overwhelming sense of guilt for her incapacity as John’s wife. She acknowledges that she is much too nervous to take care of their baby, and she is grateful that their nanny, Mary, is able to take her place.
The wallpaper now irritates the narrator even more since her first day in the house. She attempts to convince John to change the wallpaper, but John laughs at her anxiety. He argues that if they repaper the room for their three-month stay, soon she will want to change everything else in the room, too (which she privately admits is true). Still, the narrator is upset that John dismisses her request so quickly and wishes that there was some way to get rid of the paper.
To avoid looking at the wallpaper, she looks at the garden out of one window, and out of another at the bay, the estate's private wharf, and the shaded lane from the house. She thinks she sees people walking down the lane, but John tells her not to give in to these fanciful visions, as it will exacerbate her nervous condition. The narrator is still convinced that writing would heal her, but she gets tired whenever she tries. John also continues to deny her other hope for her own recovery; he will allow her to see her friends and relatives only after she is well again.
The narrator begins to be preoccupied with the pattern of the wallpaper. She is drawn to a recurrent pattern that looks like a broken neck and two upside-down eyes staring at her. The narrator is also beginning to discern something else in the unruly pattern of the wallpaper: a “strange” figure skulking in the background.
Through the window she sees John's sister, Jennie, a caring and perfect housekeeper, approaching the house. The narrator knows that Jennie spies on her and reports to John so she must make sure not to let her see her writing. The narrator also acknowledges that Jennie probably agrees with John on her diagnosis and believes that the writing has made her sick. As soon as the she hears Jennie coming up the stairs, the narrator puts away her writing and assumes a “restful” position.
This section of the story is the first time that the narrator reveals her personal insecurities about her illness. Because of her ailment, the narrator is unable to fulfill her wifely and maternal duties, and she feels that she must be a terrible burden to John. Mary (likely an allusion to the ideal mother: the Virgin Mary) has replaced her as the caretaker of the couple's baby, while Jennie is a model of the perfectly submissive and happily domesticated wife who cares for John’s house and welfare.
With the narrator's identities as wife and mother subverted, John acts more like a father to her than he does as a husband. He continues to infantilize her, calling her his "'blessed little goose.'" This paternalistic attitude extends to Jennie, who "hopes for no better profession" than being a housekeeper and who probably believes writing is the cause of the narrator's sickness. Jennie's bias against writing, however, is less forceful than John's is; John stifles the narrator's "imaginative power and habit of story-making" when she merely looks outside and thinks she sees people.
When the narrator attempts to convince him to repaper the nursery, John rejects her request almost immediately. He demonstrates his continued belief in his superiority over the narrator, particularly in terms of her health. By removing the wallpaper, John believes that he will be indulging his patient, submitting to a foolish request. Yet, as the narrator notes, the wallpaper is already extremely damaged, with large spots missing. With that in mind, it seems as if John is refusing the narrator’s request simply for the sake of refusing it. He believes that acknowledging her dislike of the wallpaper is ultimately irrational, and he cannot allow himself to perpetuate her nervousness.
John’s behavior in this section continues the paternalistic sense of his character that Gilman introduces in the first part of the story. Not only is John oppressively paternalistic as a husband, he is worse because of his position of authority as the narrator’s physician. Significantly, John’s insistence on keeping the yellow wallpaper in the nursery will ultimately be far more detrimental to the narrator’s mental health.
At this point in the story, the narrator also begins to demonstrate some mental issues. Her mind is growing more chaotic and disoriented, mirroring the image of the garden, with its "riotous old-fashioned flowers, and bushes and gnarly trees.” This initial chaos is also reflected in her writing, which becomes choppier and more distracted.
The wallpaper is also beginning to take a key position in her mind and daily reality. Instead of focusing on the general hideousness of the wallpaper as she had earlier, now the narrator begins to be preoccupied by specific elements of the pattern. In particular, she is drawn to a central pattern of broken heads and bulbous eyes. This aspect of the pattern is significant in terms of its violence; the popping eyes and deformed neck clearly suggest strangulation or suffocation, both of which relate to the narrator’s state of oppression in John’s house.
The narrator is also beginning to feels as if the wallpaper is watching her. Not only do John and Jennie watch her, carefully judging and quantifying her behavior, the wallpaper is observing her as well. This adds to the sense of imprisoned surveillance: even when the narrator is alone in the nursery, she is still being monitored. She also claims that she can see a figure in the wallpaper “where the sun is just so.” This discovery relates to the sunlight motif and also foreshadows later events in the narrative.