Before Ivan dives into his poem, he gives Alyosha a little lecture on literary history. Ivan explains that in the 16th century – which is when the actions of his poem take place – poems and plays were written about holy figures – the Virgin Mary, Christ, angels, even god – coming down to earth and conversing with ordinary people.
Ivan's own poem is set in 16th century Seville (in the 1500s), at the height of the Spanish Inquisition. It's the day after a particularly bloody massacre where hundreds of heretics were burned at the stake.
Christ decides to appear, but instead of making a grand entrance, he comes quietly and inconspicuously. (About as inconspicuously as Brad Pitt at your local mall, apparently, because everybody recognizes him.) He doesn't say anything, but he quietly performs miracles – raising a child from the dead, healing the blind – which pretty much gives him away.
As Christ goes around wowing everyone with his miracles, the Grand Inquisitor, the guy in charge of all the heretic-burning, appears. He demands that Christ be arrested by the guard, and everyone is so frightened by him that they readily comply.
Later that night, the Grand Inquisitor visits Christ in prison. He recognizes his prisoner as Christ, but, paradoxically for a self-described Catholic, refuses to listen to anything He has to say.
At this point, Alyosha is extremely puzzled. Alyosha wonders whether the whole poem is supposed to be some kind of joke. Ivan says it's not, and continues on.
The Grand Inquisitor, according to Ivan, berates Christ for rejecting Satan's three temptations back in the day when Christ was wandering the wilderness. Those three temptations, for those of you fuzzy on the New Testament, were: 1) offer everybody bread and they will follow you; 2) jump off a cliff to prove that you're the Son of God, and people will believe you; and 3) set yourself up as the ruler of the entire earth and use your power to compel people to obey you.
According to Ivan's Grand Inquisitor, Christ rejected all of these temptations because he wanted man to freely follow him (instead of being won over by bread, dazzled by miracles, or coerced by earthy power).
But the Grand Inquisitor claims Christ got it all wrong, because man does not want to be free. Or rather, only a chosen few can endure the terrible gift of freedom; the majority prefer to be led around, told what to do, and essentially be treated like children. Some even choose to accept the gift of freedom, but because they are not strong or clever enough to know what to do with it, they end up setting up reason and science as gods instead.
Here the Grand Inquisitor lets Christ in on his secret: he is on Satan's side. Out of his concern for mankind, he has deprived them of their freedom by accepting Satan's temptations, the temptations of miracle, mystery, and authority that Christ had rejected in the wilderness.
But just because the Grand Inquisitor has all the power doesn't mean he's a happy man. He views his power as a horrible burden, which he has to endure because he happens to be one of the chosen few who accept the terrible gift of freedom. He has to lie to the majority in order to deprive them of their horrifying freedom, and this lie, this sin, makes him suffer.
Alyosha finds Ivan's poem absurd, although he has trouble spelling out his objections coherently.
He asks Ivan how the poem ends, and Ivan imagines that at the end of the scene, Christ gets up and kisses the Grand Inquisitor on his wrinkly old lips. The Grand Inquisitor then frees Christ and tells him never to return again.
Alyosha doesn't understand how Ivan could possibly live with such a dismal view of the world. Ivan says he'll rely on the good old "Karamazov baseness." Ivan then reproaches Alyosha for judging him so severely, and Alyosha bends over and kisses his brother.
Ivan is immensely pleased by this gesture and takes his leave of Alyosha. Alyosha notices that Ivan is walking with a slight sway and that his right shoulder is lower than his left.
He then rushes back to Zosima, who is still on his deathbed. Much later, Alyosha will wonder how he forgot about his brother Dmitri so quickly.