The Poet asks for one hundred gold pieces to reverse the curse; Jawan agrees and returns to Baghdad to look for his son.

In Baghdad, the Poet's daughter, Marsinah, meets and falls in love with the young Caliph, who has been traveling incognito.

The Poet is arrested when he begins spending his hundred gold pieces because his purse carries the insignia of a wealthy family that was robbed.

The Poet happily accepts, and when the Wazir leaves him alone with his favorite wife Lalume, the two realize they have similar temperaments.

The Poet orchestrates an elaborate "curse-reversal" scheme that enables him to sneak out of the palace; he finds Marsinah and convinces her that he will be killed unless they flee Baghdad.

At a ceremony planned to choose a new bride, the Poet tricks the Wazir and (almost) drowns him in front of the Caliph and the crowd.