Joe and Juliana spend a day shopping in Denver, despite Joe's increasingly odd behavior. Joe dyes his hair blonde, and tells Juliana to wear a blue dress when they visit Abendsen - which they will do that night. When he threatens to kill her if she does not obey him, Juliana realizes that Joe is not who is says he is. She realizes that his hair has always been blonde, and it was in fact dyed before. Joe reveals that he is a Nazi assassin sent to kill Abendsen, and he has roped Juliana into his mission because Abendsen is attracted to dark-skinned, exotic women.
Juliana has a panic attack and briefly considers suicide with a razor blade in the bathroom. Instead, she uses the blade to cut Joe's throat when he tries to grab her. She flees the hotel and drives far away. Uncertain what to do next, she consults the I Ching. The oracle tells her to consult the prince, which she interprets as referring to Abendsen. She phones the Abendsen's home and gets Mrs. Abendsen, who tells her that she can certainly visit. Juliana realizes that it is her duty to warn Hawthorne Abendsen of the looming threat on his life from Nazi assassins - Joe will certainly not be the last.
Tagomi is lost in a haze of depression and regret after murdering the two SD agents; he wonders if this act can possibly prevent Operation Dandelion, and mourns the lack of order in the world. He tries to return the antique pistol to Childan's shop. Though Childan will not take it, he offers Tagomi a strange piece of jewelry, part of the Edfrank collection. Childan says that he will allow returns for 100% store credit, and Tagomi buys a small triangle.
He takes the piece of jewelry to a park and meditates on it, experiencing it with all of his senses - taste, touch, smell, taste, and hearing. He realizes that the piece of jewelry is a melding of the yin (metal, earth, and the underworld) and yang (fire, creativity, and light). This piece of jewelry unites these two contradictory elements, showing Tagomi a way out of paradox.
Just as he seems to be on the verge of a breakthrough, he is distracted by a passing policeman. Yet he quickly realizes that the world he is in is not quite the one that he left. He sees cars all around him instead of pedicabs, and notices the massive, ugly Embarcadero Freeway. Additionally, the white people around him show him absolutely no deference, a thing that would be unthinkable in the world of The Man in the High Castle. Tagomi realizes that he has fallen out of space and time into a parallel world.
After concentrating on the piece of jewelry once more, Tagomi slips back into his own world. Shaken, Tagomi heads to work and finds Hugo Reiss, who apologizes for the disastrous situation that led to the deaths of the SD thugs. Reiss also tries to get him to sign an extradition order for Frank Frink; Tagomi refuses, which saves Frank's life. After rudely dismissing Reiss, Tagomi has a heart attack. It is not clear whether he lives or dies.
Frank is amazed and grateful when the police unlock his cell and tell him to go. He goes back to his workshop and starts making Edfrank jewelry once more.
Baynes/Wegener travels back to Germany under the code name “Conrad Goltz.” As his plane touches down, Baynes/Wegener wonders if he will survive this return, and if the information he gave the Japanese about Operation Dandelion will make any difference. He decides that the effort is worth it, if it prevents the planet from becoming a desolate wasteland.
Wegener/Baynes is met by a group of Nazis who assert that their loyalty is to Heydrich (who approves of Wegener/Baynes' actions). They help Wegener/Baynes into a car, saying that they are taking him to a safe hiding place. Wegener/Baynes wonders if this means that he is safe and there will be no war with Japan...or if these are double agents taking him to certain death.
In a Cheyenne newspaper, Juliana sees a report that Joe is dead and no one has any information about his murderer. No one has connected the murder with her, and she is free.
She drives to the Abendsen's home, and is shocked to discover that they live in an ordinary home rather than a “high castle.” They are hosting a party in their home this evening. Juliana is immediately worried about how vulnerable this leaves him to assassins, but Hawthorne says that he isn't too worried about attempts on his life. Juliana tells him that she stopped an assassin who was going to take his life, and in return Hawthorne should answer her questions about the book. Caroline Abendsen explains that Hawthorne used the I Ching to write the book, asking the oracle questions and then making decisions about the plot and characterization based on the answers.
Juliana wonders why the I Ching felt the need to write this book, and asks the oracle itself this question. The answer "inner truth" comes up: the I Ching wanted to write the book because Germany and Japan actually lost the war. This disturbs the Abendsens, but leaves Juliana feeling peaceful.
There seem to be no consequences for murder in this world other than the ones people impose on themselves. After reading the newspaper, Juliana realizes that the police do not even know her identity - the paper refers to her as "Mrs. Cinnadella." Tagomi is shielded from legal action by Reiss, who wants to thwart his rival vom Meere. However, Tagomi suffers terrible guilt for his actions, suffering a mental breakdown and even a heart attack. General Tedeki explains that this is because Tagomi cannot reconcile the horrible paradox of taking two lives in order to preserve one life.
In Chapter 14, Tagomi is literally transported to another world by holding the Edfrank jewelry piece. This world have has many features in common with our own world, such as the Embarcadero Freeway and the profusion of cars, implying that Tagomi somehow found his way to our world. He quickly and just as suddenly returns to his own world.
Tagomi will never know that it was Frank who made the unusual piece of jewelry that took him on that strange journey, and Frank will never know that it was Tagomi who saved him by signing the warrant for his release. Indeed, all of the characters orbit around each other without meeting: Baynes will never know that it was a gun made by Frank that saved his life, and Childan does not know that it was Frank who accused him of selling fake guns.
Numerous false identities are revealed in the finale of the book. Joe Cinnadella is in fact an assassin sent after Hawthorne Abendsen; Baynes is the spy Wegener; even Hawthorne Abendsen, the author of The Grasshopper Lies Heavy, was only writing down what the I Ching told him. Hawthorne Abendsen is not even living in his "high castle," making the very title of the book false.
Just as Abendsen used the I Ching to write The Grasshopper Lies Heavy, Dick also used the I Ching to make decisions about the plot and characterization of Man in the High Castle. By stating that the oracle was channeling "inner truth" through writing this fictional novel in which Germany and Japan lose the war, is Dick implying that our world is the truest one? Or perhaps, that Dick himself (like a real-life version of Abendsen) was expressing "inner truth" by writing The Man in the High Castle?