Having left the village, Gurth begins his journey back to the knight's lodgings through a dark forest lane. The distant sounds of revelry from Ashby bring to Gurth's mind the large number of attendants, jesters, minstrels, and assorted hucksters—most of whom would be drunk and any of whom might be thieves—who are gathered in the area and might be lying in wait in the forest.

His fears are soon confirmed when four outlaws ambush him and offer to "ease" him" of his burden." Gurth is not willing to give up his and his master's money so easily, but he expresses a wish that he had a weapon to defend himself with. Rather than take his purse, the outlaws drag him along to a clearing deeper in the forest, where they are joined by two more outlaws. The whole gang is masked.

Gurth is interrogated by the thieves, who although rough and intent on taking Gurth's money seem to find amusement in the interview. Gurth admits to carrying thirty zecchins of his own, which the thieves declare must be forfeited since no Saxon with thirty zecchins should leave a village sober. Gurth says that he has saved the money to buy his freedom, to which the thieves say a bit of ale would have been freedom enough. Gurth replies that he is willing to buy his release from the thieves with the money he has saved.

The lead outlaw guesses that the purse holds more than Gurth has admitted and takes the purse, asking Gurth his master's name. The outlaws know about the Disinherited Knight's performance at the tournament and want to know his identity, but Gurth refuses to betray the knight. The outlaw asks where the money came from and how much is in the bag. Gurth answers truthfully, detailing the ransom payments and the knight's refusal to accept the Templar's prize.

When asked why he was in Ashby with his master's money, Gurth describes his errand to Isaac, the price he paid, and Rebecca's restoration of the money. The thieves find the episode too incredible to believe, but after counting the money in the bag they find it tallies with Gurth's story; Rebecca's embroidered purse with Hebrew lettering bolsters his story.

Gurth breaks free and grabs a quarter staff for a weapon, reluctant to leave without the knight's money. He knocks the chief outlaw down but is recaptured. The outlaw, however, argues that the Disinherited Knight has too much in common with the outlaws, including their enemies, and that they must show at least as much conscience toward him as the Jews have.

Gurth, however, is required to show what he can do with the quarter staff. After a long bout with a skilled outlaw called the miller, Gurth wins. The delighted outlaws guide him safely through the forest and part with him on friendly terms.

The Disinherited Knight has waited up for Gurth, who tells him about his encounter with Isaac and Rebecca. The knight has no intention of keeping Rebecca's money but is at a loss how to return it. Too tired to think about it, he goes to sleep, while Gurth stretches out in front of the tent flap to guard against unwelcome entry.