Peter tells Bridget, "You are the best woman in Ireland, but money is good too," as he looks at the money. He plans to buy some livestock with the money. Bridget talks about the fact that Delia is lucky to have Michael, a man who will not spend all of her money at once and will be a responsible and stable husband.
Peter suggests that neither Delia nor Michael were thinking much about the money, and Michael agrees, "The fortune only lasts for a while, but the woman will be there always." Patrick suddenly notes that people are cheering in the town. Michael tells Patrick to go into town and see what is going on. Before he goes, Patrick asks if Delia remembered to bring the greyhound puppy he asked for, and Michael says that she will.
Peter and Bridget discuss Patrick's fate, the fact that perhaps he could become a priest, since he is a good student. As Michael goes to the window, he notes that an old woman is coming down the path to the house. She is wearing a cloak over her face and Bridget and Peter worry that she is a beggar woman. "I'd sooner a stranger not to come to the house the night before my wedding," Michael says, as Bridget tells Michael to let him in. The Old Woman comes in.
The family makes a big deal of the money they have come into with Michael's marriage to Delia, as it is more than they have ever had. Peter plans to buy livestock with it so that they can improve their family's financial situation, while Bridget says, "It is proud she must be to get you, a good steady boy that will make use of the money, and not be running through it or spending it on drink like another." Michael and Delia's marriage marks a time of great good fortune for the family, which both Peter and Bridget celebrate.
While the fortune is a big deal for the family and for Michael, he suggests that the marriage is more about the relationship between him and Bridget than the fortune itself. He insists to his parents, "The fortune only lasts for a while, but the woman will be there always." He knows that the financial considerations are less important than the choice he has made in his bride, the woman with whom he will spend the rest of his life.
Michael's younger brother, Patrick, is sent into town, and while he is gone, his parents talk about his future, speculating about what will become of him. Bridget suggests that, since Delia's uncle is a priest and Patrick is a good student, he might be able to become a priest, as Peter tells her not to make so many plans ahead of time. The family at the center of the play is concerned about the prosperous future of their two sons, and wonders how each of the boys will be able to make their ways in the world.
Soon enough, the titular character, an old woman named Cathleen ni Houlihan, comes walking down their road. She is described as a strange old woman with a cloak over her face, and the family worries that she is a beggar at first. They hide the dowry they received from Delia, for fear that the old woman will want some of it. It is a portentous arrival, an uncanny visit from a wizened old woman. While the characters suspect that the old woman is nothing more than a beggar, there is a sense that she has some other, more mystical quality, that her arrival will herald a shift in the narrative.
The play is simple and straightforward, with very little narrative or dramatic embellishment. Yeats and Lady Gregory present the audience with a simple Irish family on the eve of their eldest's wedding, and the unexpected visitor that changes their perspective. There are no leaps in time, soliloquies, instances of dramatic irony, or even much conflict within the plot. Rather, it is a simple account, an allegory, a fable.