In the midst of battle, Basilio laments to Astolfo and Clotaldo that they have lost. Clotaldo replies that they may have lost the battle, but they can still win the war if Basilio survives, and exhorts the king to flee. The king is amazed at how bravely his son fought and says that he wishes he were such an accomplished warrior. Fife enters, wounded, and dies. The king laments Fife’s fate while Astolfo tries to persuade him to ride away to safety.

The king refuses to leave the battlefield, and Segismund enters, accompanied by Rosaura and a band of soldiers. Seeing his son, Basilio prostrates himself, offering his crown. Segismund addresses himself to the nobles and warriors of Poland, saying that Basilio misinterpreted the message he read in the stars and made his own prophecy come true when he turned his son into a savage by treating him savagely. The king is now the author of his own fate, defeated by the son he wronged. He then poses a philosophical puzzle. Since the king predicted that his son would destroy him, and then acted in order to make this prediction come true, will Segismund not be defying fate if he fails to destroy his father? Regardless of his personal inclinations, is this role of savage, destroyer, and parricide not the one that has been allotted to him by an irresistible fate?

King Basilio responds, saying he sees in his son someone better than himself and better than he was capable of understanding. Again, he presents Segismund with the crown, immediately resigning the sovereignty of Poland. He says that if his own head is saved, the Polish crown will never again decline. His words are greeted with cries of “God save King Sigismund!” and the sound of trumpets.

Segismund announces that Astolfo and Estrella will not marry. Instead, Estrella will marry him and be queen of Poland, while Astolfo will marry one who is “more dearly his” (presumably Rosaura). He then says that Clotaldo, who guarded him in the tower, will henceforth be tasked with guarding him on the throne, keeping him safely there for the benefit of all the Polish people.

Segismund then remarks that his hearers seem surprised at his fairness and clemency, which are at odds with the savage life he has lived as a prisoner in the tower. He says that he has learned these qualities from a dream, the meaning of which was expounded to him by Clotaldo. Clotaldo told him that if he should have the same opportunity that was given to him in this dream, he should behave differently, showing no anger and resentment, but mercy and self-control instead.

When Segismund was brought to the palace and hailed as Basilio’s heir, this, he says, was a dream. In it, he acted harshly, proudly, and ambitiously. What he is experiencing now may also be a dream, and the men and armor which seem so real may quickly disappear. He may wake up in his dungeon, or he might dream that he is waking up there. There can be no certainty in mortal life whether one is experiencing reality or a dream. Even if one’s good fortune is real, it may disappear as quickly as a dream. One cannot be sure of anything except one’s own behavior. The only irreproachable course of action, therefore, is always to bear yourself well and suspend judgment on the reality of one’s situation, so no one will be able to reproach you for your actions if they do turn out to have consequences in the real world. This remains true of the sleep that ends in the morning, as well as the more persistent illusion of life, which will only be dispelled by the Last Trumpet.