Mrs. Alving welcomes Pastor Manders to her house. He's here to take care of the business end of the Orphanage they are dedicating to her dead husband, Chamberlain Alving.
Pastor Manders scolds Mrs. Alving for reading radical books. She says they are not so radical; they confirm ideas she's had on her own.
Mrs. Alving agrees not to insure the Orphanage in order to protect Pastor Manders' reputation.
Oswald comes downstairs. He and Pastor Manders argue about sex before marriage. Mrs. Alving confesses that she agrees with Oswald.
Pastor Manders is angry and threatened and gives a long speech condemning Mrs. Alving's life choices. She left her husband and fled to him, endangering his reputation. She sent her son away. And now she is condoning her son's life of sin.
Backed into a corner, Mrs. Alving comes out with the truth. Captain Alving remained dissipated his whole life. And he got the maid pregnant – Regina's mother. That's why she had to send Oswald away. She's spent her whole life pretending that her husband was a good man.
Mrs. Alving and Pastor Manders overhear Oswald sexually pursuing Regina, his half-sister.
They try to figure out what to do. Mrs. Alving expresses regret that she's hidden the truth about Captain Alving from her son. Pastor Manders says it's better to keep it hidden.
Mrs. Alving listens to Engstrand spin the story of his past in a way to trap Pastor Manders supporting Engstrand's Brothel. They leave to hold a prayer service at the Orphanage.
Oswald confesses that he is sick. Mrs. Alving begins to understand there's a link between her husband's decline and her son's illness.
Regina enters and Oswald invites her to champagne. He wants to be with her, but Mrs. Alving won't have it.
Oswald talks about the joy of life, and Mrs. Alving discovers that this was the force driving her husband.
As she is about to reveal the truth about Captain Alving and Regina's origins, the Pastor enters. He stops her.
The Orphanage is on fire.
At the top of Act 3, Mrs. Alving is almost glad the Orphanage burned down. She asks Pastor Manders to take all the papers with him and deal with it himself.
Left with Oswald and Regina, she tells them the truth. Captain Alving was a miserable man, and he was Regina's father. Regina leaves.
Mrs. Alving is happy to be alone with Oswald, until he makes a request. He is going to suffer an irreversible decline, and he wants her to put him to death when that happens. Oswald asks his mother to administer morphine to him once he is in a vegetative state, so that he can die pain free.
And it happens. The play ends with Mrs. Alving holding the morphine, deciding what to do.