The following morning, behind the shuttered windows of Kyoto's luxurious geisha house, Iris sleeps and dreams. Osaka arrives in a state of lustful anticipation, but Kyoto advises him to return with costly gifts if he wants to impress the girl.

When the men leave, Iris awakens, recalls the events of the previous day, and believes herself in paradise. Osaka returns and makes passionate advances to the childlike Iris, who laughs in astonishment at his high-flown talk of love. Recognizing his voice from the puppet play, however she addresses him as "Son of the Sun", at which he laughs mockingly and suggestively tells her that she should call him by his real name, "Pleasure".

This terrifies her, and she explains that a priest in the temple once taught her that pleasure means horrible death. Bursting into tears, she begs to return to her father. Osaka leaves in disgust, advising Kyoto to get rid of her.

Instead Kyoto decided to make whatever profit he can by putting Iris on the public display. When she balks, he opens a secret wall panel and shows her a dark shaft, threatening to pitch her down it unless she follows his orders. To calm her he lets her play with the Jor puppet from the previous day as the geishas dress her in a ravishing costume. Then Kyoto places Iris upon a balcony overlooking the street, where her appearance enchants the crowd.

Osaka, seeing her again, and more beautiful than ever, prostrates himself before her, calling out to her by name.

At that moment, Il Cieco arrives on the scene. Overjoyed, Iris directs him to where she stands, but instead of rescuing her, Il Cieco flings mud in her face. Driven to distraction, the humiliated girl runs back into the house and throws herself down the shaft before anyone can stop her.