This portion of Ceremony begins by depicting an event from before Tayo's time at war: Tayo and Rocky's meeting with the U.S. Army recruiter. The recruiter had set up a table with posters next to the local post office; it was a windy day, however, and the recruiter's printed pamphlets had been blown around. Using the rhetoric of patriotism and responsibility, he reaches out to the two young men. Rocky, who wants to be a pilot, signs up. Rocky also claims Tayo as his "brother" in front of the recruiter, even though the two are technically cousins, and even though Tayo's mother had brought disgrace on her relatives.
Silko then depicts Tayo's early childhood, particularly how his mother had turned him over to Auntie when he was four years old. At first, Auntie's household had been a scene of tension and loneliness for Tayo; Rocky, for instance, loudly protested against treating Tayo as a companion and "brother." Over time, however, Tayo both settled in and began to comprehend the stern, distant Auntie. Auntie's main objective was to secure a proud place for her family in the traditional Pueblo community, despite both her devout Christianity and the indiscretions of her sister (Tayo's mother). For her part, Tayo's mother had been attracted to the ways of white society, even at its most violent and dissipated.
At one point, Auntie had opened up to Tayo about his mother's scandalous conduct. Early one morning, just at dawn, Auntie had seen Tayo's mother arrive home, disoriented and completely naked except for her high-heel shoes. This story stays with Tayo; he remembers, though, that Auntie at other times had attempted to efface all memory of his mother. When he was younger, Tayo had possessed a picture of her, but Auntie took it from him one day when the household had visitors. Josiah comforted the young Tayo, but the picture never reappeared.
Ceremony then returns to the period of Tayo and Rocky's army enlistment. At first, Tayo had resisted signing up because he wanted to stay at home and help Josiah raise cattle; however, he eventually agrees to go under the premise that he and Rocky will protect each other in combat. Josiah, in the meantime, will carry on with his plan to breed livestock that can survive in the tough, arid Laguna landscape. Rocky, who has faith in modern farming methods, voices disdain for Josiah's project and Josiah's intuitions, but Josiah remains enthusiastic and even considers writing a book of his own, provisionally titled Raising Cattle on Indian Land.
Nonetheless, Auntie is convinced that the man who sold Josiah the cattle, Ulibarri, had duped Josiah in order to make money on worthless Mexican livestock. Soon after Josiah's Mexican cattle arrived, they begin running off in one large group. Josiah and Tayo are able to manage them to some extent, observing the births of new calves and branding the mature cattle, which remain standoffish and continue to run to the south. Eventually, Josiah decides that he needs to make a brief trip to see the woman who brought Ulibarri's cattle to his attention, apparently to express his gratitude. He finds this woman sitting in a wicker chair on her porch, enjoying a mellow day.
Silko then details the relationship between Josiah and the woman, a Mexican dancer once known as the Night Swan. Their contact is easygoing and based on sexual intimacy; the Night Swan also reveals some of the details of her violent and tumultuous past, particularly her affair with a married man in Las Cruces who, apparently, was trampled by his own horses. The Night Swan acknowledges to Josiah that she is settling into old age. For their part, the people of the Laguna reservation learn to live with her presence and see her erotic encounters as something of a joke, even though Josiah's intimacy is regarded by Auntie as another blow to the family's reputation.
Once the cattle arrive, Tayo and Josiah split their energies between the cattle and a sheep camp that they oversee. At one point they are assisted by a very competent sheepherder, an Apache named Mike, but when Mike leaves they bring in a relative named Pinkie, who is not especially hardworking and who is also susceptible to blackout spells. The tension in Auntie's household remains considerable, as Josiah continues to see the Night Swan during the evenings.
In the summer before the war, Tayo rides a mare over the Laguna landscape, observing nature and reflecting on the permanence and persistence of the natural rhythms of life. One rainy day, Josiah asks Tayo to take a letter to the Night Swan. This errand, however, leads to an erotic encounter between Tayo and the Night Swan, who tells the young man that she has been waiting for him. Tayo makes a few remarks about his Mexican heritage, which has estranged him from the other people in his community; the Night Swan claims that such people are afraid and uncomprehending, uncertain how to face the future, before she sees Tayo out.
The narrative then returns to Tayo's present life. He temporarily leaves Harley at the bar and walks west, reflecting on Josiah's old-fashioned beliefs about animals such as flies. When Tayo returns to the bar, he finds that Harley has departed. Tayo sets out on his own, walking; after a time, he rests against the side of a closed store and reflects on all that has changed since the war. The bar that the Night Swan had lived above is now closed. He eventually makes his way to a hayloft and falls asleep. Later on, Tayo returns to see Robert and expresses his desire to start helping out again, but Robert remains skeptical that Tayo has recovered from the trauma of war.
Ceremony then shifts its focus to life near Gallup, a town located near Highway 66 and frequented by white tourists interested in Indian trinkets. Near Gallup, there was a shanty community situated by an arroyo; the women who live in the shanty shelters work as prostitutes and often become pregnant. Silko's narrative depicts a very young boy (presumably Tayo) who was born into this lifestyle; for a time, this boy observed his mother's escapades, but eventually the police destroy the shanties. The mother is taken away. The boy remains in the area, convinced that she will somehow return.
As Ceremony progresses, Silko emphasizes new aspects of the relationship between the traditional Laguna community and the modernized white world. So far, this relationship has been portrayed as mostly destructive, especially for the Laguna people. Warfare has robbed these Native Americans of some of their most promising young people (for example, Rocky) and reduced those who remain to drunken irresponsibility. Yet the flashback to the appearance of the army recruiter is a reminder that the destructive aspects of Caucasian society can initially appear as symbols of hope—even if they become destructive realities. Rocky, after all, joined the military not in order to kill other men, but because he wanted to "fly all over the world" as an air force pilot (60). He is reduced, however, to a killer of men, and then to yet another of the victims of war.
Rocky knew what world he wanted to inhabit: the white-dominated world of technology and modernity. For other characters, the choice of culture and of alliance is somewhat more complicated. Auntie, for instance, has tried to make her own break with Native American tradition by making Christianity a central part of her status and lifestyle: "Tayo wondered if she liked it that way, going to church by herself, so the she could show the people that she was a devout Christian and not immoral or pagan like the rest of the family" (71). Christian observance is her way of showing the community that she is a moral person, yet the very community that she seeks to impress is still guided by "pagan" beliefs, as the local importance of figures like Old Ku'oosh attests.
Nor is Auntie the only character whose alliances, culturally and ideologically, are difficult to pin down. Josiah himself is important to these sections as a representative of a few different forces that can combine in ironic ways. He wants to raise cattle on Indian land (and thus fit into tradition); he also wants to write a book about his experiences (and thus fit into a modern dialogue about raising livestock). He remains within a fairly close-knit Laguna family, but also looks outside his community and ethnicity in having an affair with a Mexican woman, the Night Swan. Tayo and the reader are meant to regard Josiah's loss of the cattle as a striking downfall; otherwise, few things about Josiah's character and affiliations are clear.
To some extent, Tayo recedes in these largely retrospective sections. His experiences during the war are no longer Silko's main focus, and when he is present, it is largely as an observer of events that are set in motion by other, perhaps more assertive characters. Even in the encounter with the Night Swan, Tayo is the one who is seduced. The frequent passivity of Silko's protagonist, though, is not necessarily a weakness of these stages of the narrative. It would be difficult for even the most skilled novelist to fully sketch out Auntie's psychology, or the fate of Josiah, or even the vivid memories of the Night Swan, while also portraying Tayo in the midst of tension or conflict.
But Tayo's experiences during these chapters also allow Silko to deliver a commentary that extends beyond a few characters; her evocations of the destitute arroyo-dwellers imply a critique, at once broad and insightful, of the ravages of poverty. In depicting the boy with the dissolute mother, Silko explains that this child falls into a series of routines: "He got used to her leaving the bar with men, giving somebody a dollar to buy the boy food while she was out. After he ate, he slept under the tables and waited for her to come back" (101). A reader is meant to see these circumstances as destructive. A poor boy—whether Tayo or any of the countless other poor children in the shantytown, or another shantytown like it—learns to see them simply as how life works. Poverty is so destructive because, after a time, it can seem like a normal lifestyle to those caught in its grip. Tayo has grown up to avoid such destitution, but whether he can avoid making drink, violence, and laziness his new "normality" has yet to be seen.