Sissy is surprised to see that her father is not in his room at the Pegasus Arms Inn. She leaves Bounderby and Gradgrind there while she goes to search for him.
Gradgrind and Bounderby meet two of the performers, E.W.B. Childers, a horse rider, and Master Kidderminster, "a diminutive boy with an old face." On stage, he usually plays children, but in real life has "a precocious cutaway coat and an extremely gruff voice."
The four men trade insults back and forth, with Gradgrind and Bounderby insisting that performing in the ring is the kind of job lazy slackers do. Childers and Kidderminster call them out on their ignorance about how hard it actually is to be a circus acrobat or horse-rider. In the middle of all the sarcasm and name-calling, we learn that Sissy's dad has been "missing his tip" quite a bit of late, which is circus slang for "Didn't do what he ought to do. Was short in his leaps and bad in his tumbling."
Childers suggests that Signor Jupe may have run off and left his daughter, despite (or because of) how much he loved her. Childers tells Gradgrind that Signor Jupe's main hope was to get Sissy an education at the Coketown school.
The rest of the performers shuffle into the room. Mr. Sleary, circus owner and operator, introduces himself to Bounderby and Gradgrind. The man speaks with a really pronounced lisp.
Sissy comes back, not having found her father. While she is weeping, floored by his disappearance, Bounderby decides that she needs some facts to snap out of it. He whips out this delightfully empathic morsel: "Your father has absconded – deserted you – and you mustn't expect to see him again as long as you live." He's pretty surprised by two things: one, she is still crying; and two, Sleary threatens to throw him out the window.
Gradgrind is clearly not quite as horrendous as Bounderby. He changes his mind about expelling Sissy. He instead offers to keep her in school and to let her come live at his house.
Sissy agrees, and says a tearful good-bye to each member of the circus troupe.
Sleary then busts out with the anti-fact philosophy that this novel is pushing pretty hard: "People must be amuthed thomehow."