Training begins. Kambei plans for the village's defenses by flooding certain fields, building walls and evacuating some of the outlying buildings. That last part kind of sticks in Gisaku's craw, since he lives in one of them.
The other samurai begin training the villagers to defend themselves
Kambei, Katsushiro and Gorobei find a peaceful glade near the village, and decide that it's the weak point, where they can lure the bandits into a trap.
Katsushiro spots Shino, sees through her disguise, and starts making eyes at her. Shino awkwardly returns the gesture. Awkward young romance subplot ensues.
Kikuchiyo discovers a cache of weapons and armor in the village: booty stolen from samurai they've killed.
Shichiroji is kind of freaked out by it, but Kambei tells him to let it go.
Kikuchiyo goes on a rant decrying how sneaky and nasty farmers are. Kambei guesses that he's actually a farmer's son and not a samurai at all.
Heihachi reveals that he's making a banner for the village: something that they can all rally around because every good ragtag army needs a ragtag banner.
Katsushiro shares a bowl of rice with Shino, which is a big deal since the farmers are eating millet while the samurai get the rice.
She takes it to one of the old women in the village, who follows it up with one of those shrieking "I want to die" numbers that this community seems to be so into.
Kambei carefully explains why they have to abandon the outlying buildings: they're not defensible and it's better to lose them than the whole village. The farmers don't entirely get it.
Kikuchiyo tries to get friendly with some of the farmers, only to inadvertently touch a sore spot; Rikichi's wife is with the bandits.
Kikuchiyo tries really, really hard to ride a horse, but the horse has other ideas.