Pastor Manders arrives at Rosenvold on the steamer. He is received by Regina and encourages her to go home and live with her father.
Pastor Manders greets Mrs. Alving and scolds her about her reading. He asks her to forego insurance on the Orphanage, and she agrees.
Oswald enters, and Manders has an argument with him about the sinfulness of "irregular marriages."
When Mrs. Alving confesses she agrees with Oswald, Manders lets her have it. He tells her that she is selfish and wayward. She left her husband, abandoned her child, and continues to behave badly.
Pastor Manders is shocked to learn that Captain Alving was just as dissipated at the end of his life as when Mrs. Alving fled at the beginning of their marriage. Still, he thinks she's done the right thing in keeping the truth to herself.
Pastor Manders and Mrs. Alving overhear Oswald pursuing Regina in the next room.
Manders realizes that Engstrand lied about getting Regina's mom, Johanna, pregnant. He therefore believes that he (Manders) has committed some sin in marrying them. The Pastor resolves to have some words with the carpenter.
The Pastor urges Mrs. Alving not to sacrifice her son's idealization of his father.
Engstrand enters. After going after him for lying, Pastor Manders listens to Engstrand's side of the story. He claims to have covered up Johanna's promiscuity to rescue her from waywardness and make her respectable.
Pastor Manders gives the carpenter a thumbs-up and even apologizes to him.
Pastor Manders and Engstrand leave together to hold a prayer service at the Orphanage.
The Orphanage burns down.
When Pastor Manders enters again, he's freaked out. Engstrand is claiming that the Pastor caused the fire, and hinting that the public will tear him apart.
Engstrand offers to take the blame for the fire if Manders will support his sailor's home with Captain Alving's funds. (We know that the "Sailor's Home" is really a brothel.) Manders takes him up on it.