The grand master declares Rebecca innocent and awards Sir Brian's body and gear to Ivanhoe. Wilfrid again refuses to accept Sir Brian's horse, armor, and weapons, but he orders his burial to be private—as a man who died "in an unjust quarrel."

Richard arrives with a force of knights. He reproaches Wilfrid for not letting him be the one to fight the Templar. Richard then orders the arrest of Preceptor Malvoisin for treason. When the grand master protests, Richard points out that the banner of the Templars has been replaced with the flag of England. He tells Beaumanoir to dissolve the Templestowe chapter and take his Templars to another preceptory that has not engaged in conspiracy.

The grand master proudly gathers his knights to depart, but there is tension between the ranks of Templars and the knights of the Earl of Essex, who support Richard. Richard, unable to resist, challenges the Templars, but the grand master declares that his knight will not fight over idle quarrels. He will take his complaint to the pope, and Richard will see what the princes of Europe have to say about it. As they ride off, Richard wistfully regrets that such valiant knights are so untrustworthy.

Rebecca is embraced by her father, who wants them both to go to Ivanhoe and throw themselves at his feet. Rebecca cannot bear to see Wilfrid, however, and begs to flee. Isaac objects that they will seem ungrateful, but Rebecca says they will show their gratitude later. She gives as her reason the presence of King Richard, and Isaac considers that he has lent money to John to operate his conspiracy against Richard. They hastily depart.

Ivanhoe remarks to Essex that it was fortunate that Richard brought an escort, but the earl shakes his head. He was riding with his knights to York to disrupt Prince John's preparations when he met Richard galloping along the road with the intention of making himself Rebecca's champion. They followed him, but barely with his consent.

Wilfrid asks for news from York, and Essex assures him that John's followers are dispersed. John himself bumped into them on the road. Richard received his brother warmly and recommended that he go stay with their mother until things cooled down.

In the aftermath of Richard's return, the Malvoisins are executed, and De Bracy and Fitzurse are exiled. Cedric is unable to revive Athelstane's interest in either Rowena or the Saxon cause—he is single-mindedly engaged in a feud with St. Edmund's.

Athelstane did not after all hang the abbot, although he locked the clerics of St. Edmund's in the dungeon for three days without a decent meal, for which the abbot threatened to excommunicate him. Between Athelstane and Rowena's opposition to the marriage and Richard's entreaties on Wilfrid's behalf, Cedric finally consents to the betrothal of Wilfrid and Rowena.

The wedding is held in the minster of York and attended by Normans—including King Richard—as well as Saxons. Gurth and Wamba become part of Wilfrid's household.

Two days after the wedding, Rebecca visits Rowena. She kneels and kisses the hem of Rowena's robe, saying that she is returning thanks for Wilfrid saving her. Rowena replies that Wilfrid was the one whose act was only partial payment for Rebecca's kindness toward him. Rebecca asks her to pass along her farewell to him. She and her father find England too dangerous and are going to live in Spain.

After satisfying each other's curiosity by removing their veils, Rebecca gives Rowena a diamond necklace and earrings. Rowena at first refuses to accept so valuable a gift, but Rebecca insists. Jews, she says, may sometimes be wealthy but are not by nature stingy. She adds that she herself will no longer wear jewels but dedicate her life to serving God.

Rowena tells Wilfrid about Rebecca's visit, and he is deeply moved. The narrator wonders if over the course of his life, the memory of Rebecca was recalled to Ivanhoe's mind more often than his wife would approve. As to his fortunes, Wilfrid rose with the fortunes of Richard until the end of his short—meteoric—reign.