The fire department shows up at Montag's home at the end of Part I. In the beginning of Part II, Beatty turns to Montag and says,
"Didn't I hint enough when I sent the Hound around your place?" (pg 113)
The government was already suspicious, but it was important to Montag to find out who specifically reported him. He asks Beatty if it was his wife, Mildred.
Beatty nodded. "But her friends turned in an alarm earlier that I let ride. One way or another you'd have got it." (pg 117)
Montag had quoted poetry--reading out of the book in his hand--to the neighbors who were visiting Mildred. Faber had told him that was a big mistake, he had warned him through the earpiece not to read the poetry, but Montag was challenging the system. All of the neighbors said that they would not come to visit the Montag household any longer. Beatty tells him how silly that was.
"Give a man a few lines of verse and he thinks he's the Lord of all Creation. You think you can walk on water with your books." (pg 118)
This was a telling moment for Montag because all that his life had been was now gone, and he had to make a decision to stay and face the music or leave and start a new life somewhere else. He chooses to leave.