In the old schoolroom, Dorian asks Basil once more if he's sure he wants to see Dorian's secret. Basil confirms, but he's obviously uncomfortable—what are they doing in this dingy old room? Why would Dorian take him to this dreadful place?
Basil thinks Dorian has lost it (which he pretty much has). Dorian flings off the covering from the painting, and Basil sees the horrible image that lies beneath.
Basil is shocked, appalled, terrified, disgusted—basically, there aren't enough adjectives to contain his horror. He sees his own signature on the terrible picture, and he can tell that the subject is Dorian, but he can't believe his eyes. What could it possibly mean?!
Dorian is eating all of this up; he's delighted by Basil's terror. He reminds Basil of the wish that he once made, that the portrait could grow old and he stay young…
Basil remembers, but doesn't believe that it could possibly have happened (understandably). He tries to explain the portrait's transformation scientifically, but it's impossible.
Basil is thoroughly disgusted by the image of the evil man in the portrait. If this is what Dorian's soul looks like, he says, all the grotesque stories about him must be true. He has the answer to his question.
By now, both Basil and Dorian are upset—even Dorian is crying. Basil tries to capitalize upon this moment of vulnerability, and tells Dorian he must pray for forgiveness, but Dorian weakly says that it's too late. Basil pushes back, saying that Dorian's done enough evil—after all, the cursed portrait proves that.
Dorian looks back at the portrait, and is suddenly filled with hate and rage for Basil. He seizes a knife and brutally stabs his former friend to death.
Whoa. That was really sudden—we totally didn't expect it, and neither did Dorian. He's flustered, but he doesn't actually feel bad about the murder; he tries to emotionally disconnect from it. His primary concern is how to dispose of the body and avoid getting caught.
Dorian realizes that since Basil was supposed to leave England, it'll probably be ages before anyone even notices that he's missing.
Dorian has a sudden flash of inspiration—he makes his own alibi by sneaking out of the house, then ringing the doorbell to get back in, as though he's just coming home really late. When his valet lets him in, Dorian explains that he forgot his key, and has been out all night.
Back in the library, Dorian thinks over the situation, and comes up with a solution, apparently in the person of someone named Alan Campbell.