The following Friday, the narrator finds an apology note from Holly Golightly on his doorstep, explaining that she won't bother him again. The following Thursday, Holly leaves an invitation to stop by her apartment for a drink that night in his mailbox. He is relieved, as he has been consumed by thoughts of her all week.
When the narrator arrives at Holly's apartment, which is oddly void of furniture and has a makeshift appearance, he is greeted by O.J. Berman, a Hollywood agent. While Holly is in the shower, Berman explains to the narrator that Holly is a "phony", and tells him the story of how he met her. At fifteen, she had been living with a horse jockey in Santa Anita. Berman spotted her potential as an actress; he got her work as an extra in films and gave her French lessons to smooth out her "hillbilly" accent. But when Berman secured her an audition for a large part in a film called The Story of Dr. Wassell, she fled to New York the day before the audition, telephoning Berman only to tell him that she didn't want the part. Before Holly joins them in the living room, Berman tells the narrator that Holly is planning to marry a man named Rusty Trawler.
Within the space of fifteen minutes, Holly's apartment fills up with strange men, many of them much older than Holly. The narrator observes that the guests do not seem to know each other, and that Holly has "distributed her invitations while zig-zagging through various bars." The narrator amuses himself by browsing Holly's bookshelf, which contains only volumes about horses and baseball. He notices Rusty Trawler, a short, plump man with a babyish appearance, to whom Holly pays particular attention. Inside a book titled The Baseball Guide, the narrator finds several newspaper clippings about Rusty, which identify him as an orphaned millionaire heir who gained notoriety at the turn of the century when his godfather and custodian was arrested on charges of sodomy. The clippings further describe Rusty's adulthood, which was consumed by three messy marriages and divorces. Included in the clippings are tabloid articles that document Rusty's relationship with Holly.
Holly approaches the narrator and he asks her about her unusual selection of books. She reveals that it's part of her "research": "If a man doesn't like baseball, then he must like horses, and if he doesn't like either of them, well, I'm in trouble...he don't like girls." She tells the narrator about why she decided against being an actress: actresses need to abandon their egos. She talks about her cat, whom she refuses to name because they don't "belong to each other", and describes how she enjoys visiting Tiffany's when she has the "mean reds", a state of depression the narrator likens to angst.
Rusty Trawler brings the narrator a drink, and Rusty and Holly bicker affectionately when he complains that he is hungry. When the narrator comments that Rusty seems to be clinging to childhood, Holly explains that he "feels safer in diapers than he would in a skirt...which is really the choice." She tells the narrator that she advised Rusty to realize his homosexuality, but that he tried to stab her with a butter knife at the mere suggestion.
Holly suggests that the narrator resume a conversation with O.J. Berman, who has contacts that could help him with his writing career. She is interrupted by Mag Wildwood's entrance. Mag is a tall, eccentrically dressed woman with a pronounced stutter. She explains to Holly that she came uninvited after working with Yunioshi, for whom she was modeling in a magazine shoot. Mag flirts with Berman, and while he escorts her to the restroom, Holly suggests to the guests that Mag has venereal disease.
When Mag returns, she is upset to find the guests suddenly cold and hostile. She insults Holly and tries to start a fight with an older male guest. The party, Holly included, disperses toward the front door of the apartment. Preparing to leave, Holly asks the narrator to see Mag home in a taxi. As Mag rises, she passes out. The narrator checks her pulse and breathing, props a pillow under her head, and leaves Mag sleeping on Holly's living room floor.
On Friday afternoon, the narrator runs into Holly on the stairs of the brownstone, where she chastises him for leaving Mag on her apartment floor. The narrator is confused by Holly's sudden sympathy for Mag. Over the weekend, his confusion is deepened when a well-dressed, attractive Latin man comes to his door, looking for Mag Wildwood. Later, he sees the same man bringing suitcases into the brownstone.
On Sunday, the narrator sees Holly and Mag sunbathing on the fire escape, drying their freshly washed hair. He overhears them discussing Mag's relationship with the Latin man, whose name is Jose Yberra-Jaegar. Mag tells Holly that she is lucky that Rusty is American, and their conversation turns to the topic of national pride. While Mag is happy to be American and supports her countries efforts in the war, Holly is indifferent, and tells Mag that she plans on leaving as soon as the war is over.
Holly discusses her brother Fred, a soldier, and calls him stupid. Mag believes she is talking about the narrator, whom Holly also calls Fred, and admits that he looks stupid. Holly corrects Mag's mistake, but concedes that the narrator does look stupid: "anybody with their nose pressed against a glass is liable to look stupid."
Mag expresses concern over moving to Brazil once she and Jose marry. She reveals that while he aspires to be President of Brazil, she wishes for him to give up politics so that they can stay in America. Mag asks Holly if she and Jose appear to be madly in love to which Holly responds that it depends on his behavior in bed. Mag is embarrassed, but then confesses that Jose laughs during sex. Holly approves of this light-hearted habit: "most of them, they're all pant and puff."
Holly pressures Mag for more details about Jose's sexual habits, but Mag claims she doesn't remember: "they go out of my head like a dream". She claims that's the "normal attitude." Holly scoffs: "It may be normal, darling; but I'd rather be natural." She advises Mag to leave the lights on during sex, to which Mag responds that she is a "very conventional person". Mag calls Holly "a cold plate of macaroni", and Holly responds that while Mag has a warm heart, she is insubstantial. The two women bicker, both admitting that Holly would be better off in Brazil than Mag.
The narrator's conversation with O.J. Berman expands the focus on Holly's artifice established in the previous section. Berman calls her a "phony", but "a real phony...[she] believes all this crap she believes." Holly's contrived, or "fake" identity and lifestyle is real because it permeates her life: for Holly, nothing is more natural than assuming different roles and personas. Berman's account of Holly's earlier lives as a girlfriend to a horse jockey and an aspiring Hollywood actress enhance the reader's understanding of Holly's chameleon nature. In particular, Berman's description of Holly's original accent as "hillbilly or an Okie" confirms the narrator's suspicion of her rural background while leaving the exact nature of her origin mysterious. The reader learns that even Holly's distinctive speech, peppered with French phrases and American slang, is contrived, the result of French lessons designed to "smooth out" her country accent.
At Holly's party, the fluidity of human sexuality is again put under scrutiny. In the opening sections of the novella, the narrator's sexual orientation is unclear; at Holly's party, it is suggested he is a homosexual. Browsing Holly's bookshelf and finding only volumes about horses and baseball, he admits that he was only "pretending an interest" in both subjects in order to gain a vantage point from which to observe Holly's friends. When he asks Holly why she only collects books on these topics, she responds: "If a man doesn't like baseball, then he must like horses, and if he doesn't like either of them, well, I'm in trouble anyway: he don't like girls." The narrator does not correct her, implying that he agrees with Holly's observation.
While critics of the novella have been eager to cast the narrator as gay, we must remember that sexuality in Breakfast At Tiffany's is never presented in reductive, straight/gay terms. Holly's discussion of Rusty Trawler in this section exemplifies the novella's exploration of sexual identity as being a fluid process that evades labels. When the narrator comments on Rusty's infantile relationship to Holly, she responds that Rusty simply "feels safer in diapers than he would in a skirt...[he] tried to stab me with a butter knife because I told him to...settle down and play house with a nice fatherly truck driver." Holly thus suggests not only that her Rusty's attraction to her is that of a child to a parent, but that his infantile proclivities are a defense against recognizing his homosexual nature. The impossibility of defining Rusty as either "straight" or "gay" indicates the novella's treatment of human sexuality as a complex and often indefinable phenomenon.
The third section also introduces three of the novella's main recurring motifs: Tiffany's, the "mean reds", and Holly's nameless cat. All three symbolize different facets of Holly's sense of homelessness and her conviction that she does not belong in the world. Holly describes Tiffany's as her antidote to a state of depression she calls the "mean reds" - not "the blues", but a profound fear of the unknown. Tiffany's, in contrast, is a place where "nothing very bad could happen to you": Holly feels at home in the store. Her cat, a wild animal she picked up by the river, is a projection of Holly's sense of not belonging. She refuses to name the pet, stating that she and the cat, "don't belong to each other: he's an independent, and so am I." She tells the narrator that once she finds a place that made her feel like Tiffany's, she would, "buy some furniture and give the cat a name." A sense of belonging, as symbolized by Tiffany's, is required for Holly to escape the "mean reds" and acquire a stable identity and lifestyle.
The fourth section of Breakfast at Tiffany's is short, consisting mainly of the narrator's observations of Holly and Mag Wildwood conversing on the fire escape. It establishes the fickle relationship between the two women, who had fought bitterly only a few days earlier. Through the dialogue between Holly and Mag, a "very conventional person", the reader's sense of Holly's unorthodox nature is heightened. Mag's embarrassment at discussing sex, her confessed sexual passivity (she prefers to leave the lights off during sex), and blind patriotism stand in sharp contrast to Holly's candor, sexual assertiveness (she states boldly that "men are beautiful"), and indifference toward her home country, a dangerous sentiment during the heightened patriotism of war time America. Holly's statement that she would "rather be natural" than normal indicates another recurring concern of the novel: that definitions of what is "normal" are arbitrary, and serve to control and restrain the natural freedom of the human spirit. Moreover, Holly's interest in Jose's sexual habits, as well as her statement that she would be better off in Brazil than Mag, indicate Holly's preoccupation with Jose and foreshadow the affair that occupies the novella's later sections.
Holly and Mag's brief discussion of the narrator, whom Mag confuses with Holly's brother Fred, confirms the novella's earlier characterization of the narrator as a outsider who observes, rather than participates in, his own life. Holly's claims that he "wants awfully to be on the inside staring out" suggests that she believes that the narrator's sense of exclusion is not his own choice and is, in fact, a source of despair for him. The narrator's position as unseen voyeur of Holly and Mag's conversation, literally "pressed up against the glass" of his fire escape window, ironically confirms Holly's statement.