Charles is painting a portrait of Julia (which he "never tire[s] of doing") one afternoon at Brideshead. They haven’t seen each other in about a hundred days, as they’ve been keeping up appearances for the sake of Celia’s children, as she requested.
Charles and Julia recall all the times they’ve met in secret over the last two years, in various locales all over the world. It’s clear that they’re in love with each other.
Julia says that she wants to marry Charles so that she can have "a day or two […] of real peace" with him. She knows this will take some planning, not to mention a divorce or two. Julia says she "feel[s] the past and the future pressing so hard on either side that there’s no room for the present at all." (Paging Jay Gatsby!)
That night, the happy [adulterous] couple is surprised to hear from the butler that Julia’s brother Brideshead has arrived from London. Charles notes that Brideshead is somewhat of a mystery, having managed to do nothing concrete with his adult life except become a famous collector of match-boxes.
When he arrives, Charles notes that, although 38, he looks about 45 as he’s grown heavy and bald. He declares that he has something to say, but wants to wait until the three of them are alone (without the servants).
Brideshead, in what Charles calls his typically "preposterous yet seldom […] absurd" manner, says that if he were a painter, he would paint action pictures, like battle scenes.
Then he asks where his mother’s jewels are, and Julia explains that they are in the bank.
Finally, after dinner, when the three of them are alone, Brideshead announces that he’s going to be married. Julia wants to know if she’s pretty. Not exactly, he says. She’s big. And her name is (attractively) Mrs. Beryl Muspratt. She’s a poor widow with three children. Her dead husband collected matchboxes, which is how they met in the first place.
Julia and Charles congratulate him, then ask why he hasn’t brought her to Brideshead with him.
Brideshead explains that it doesn’t matter to him if Julia wants to "live in sin" with Charles, but that Beryl is a woman of "strict Catholic principle" and would never stay under the same roof as such activity.
Julia leaves the room in tears. Charles tries to tell Brideshead off, but he is emotionless in return.
Charles goes looking for Julia and finds her outside, sitting at the fountain. Julia explains that she’s not upset at her brother; she’s upset because what he said is true. Then she rants about what it means to live with your sin constantly.
While she speaks of religion, Charles feels distant from her.
They go to her room and she freshens up her face after all that crying. They go back downstairs to join Brideshead, who acts as though nothing happened.
He explains that he and Beryl are moving into Brideshead, which of course means that Rex and Julia have to move out.
Later, Charles tries to tell Julia that religion is bunk; Julia wishes that it was. She discloses that Sebastian has gone back to the church himself. She feels as though she’s too far gone, but thinks she should try and put her life in order, which means marrying Charles and having a baby with him.
They move to the fountain outside again. Charles makes a joke of the situation, and Julia says she hates when he does that and hits him across the face with her switch. Twice. Then she asks if it hurt, cries, and kisses him.
The next night Charles has to listen through Rex and his associates babbling again about current events. He and Julia escape outside to be alone.