As Book II begins, Don Quixote is back at home in La Mancha, under the watch of his niece and housekeeper. The priest and barber visit Don Quixote to see how he is doing. They don't want to remind him of his recent adventures because the old gentleman needs to stay at home. Sancho arrives with news that there is a book called The Ingenious Gentleman Don Quixote de la Mancha. Sancho finds a young scholar named Sampson Carrasco and Carrasco gives the two men the details of the book. Quixote and Sancho are more energized to continue their adventures, now that their previous adventures have been chronicled and published. Quixote's niece and housekeeper insist that he should remain at home but Quixote does not pay much attention to them.
On the road, Quixote decides that he wants to go to Toboso to see Dulcinea. Sancho tries to dissuade Quixote from doing this, but the knight persists. Quixote wants Sancho to lead the way, but of course, as Sancho has only pretended to visit Dulcinea, the squire does not actually know how to reach Dulcinea's home. In the end, Sancho grabs a girl from a mule and says that it is Dulcinea only she has suffered an enchantment. The ugly is very ugly and she has a horrible odor. She runs off and Quixote is saddened that Dulcinea's beauty has been withheld from him. The two travelers are apprehended by "The cart of death," and the knight and squire fear for their lives. In the end, the men inside of the cart convince Quixote that they are merely actors.
Quixote continues on the road and in the middle of the night he encounters his next adventure: The Knight of the Woods and his squire challenge Quixote and Sancho to do battle. That night the two squires talk to each other and each man is convinced of his master's madness. In the morning, Sancho refuses to battle the Squire of the Woods because of his giant and hideous face. Quixote looks at the costume that the Knight of the Woods is wearing and he renames the knight as Knight of the Looking-Glasses (mirrors). Quixote throws the knight off of his horse. The Knight and Squire turn out to be Sampson Carrasco and Tom Cecial, a neighbor of Sancho. Sampson intended to defeat Quixote and bring him home, but alas, Sampson has lost.
Quixote believes that Sampson and Tom are enchantments.
Quixote gets into trouble in the countryside, killing seven sheep because he perceived them to be pagan warriors, and unsuccessfully baiting a fierce lion to fight with him. After this adventure, the knight renames himself Knight of the Lions.
Quixote and Sancho attend a wedding where a poor man named Basilio manages to secure the bride, Quiteria the Fair, despite the fact that Quiteria was supposed to marry Camacho the Rich. Basilio's cousin is full of stories, chivalric and otherwise. He tells the story of the Cave of Montesinos, and Don Quixote is eager to see the cave. Basilio brings Sancho and Quixote to the cave, which is a hole in the ground. Quixote is lowered into the hole and he then falls asleep. When Quixote is dragged out, he claims that he has had visions about sage magicians and enchantments.
Quixote's luck turns for the worst when he becomes the amusement of a twisted duke and duchess. Sancho and Don Quixote are their guests of honor, for several weeks. The castle staff is instructed to play a number of cruel jokes on Quixote and Sancho. All of these jokes have the effect of deluding Quixote into believing that chivalry and enchantments are true. The duke and duchess have read The Ingenious Gentleman and from the stories that Sancho tells her, the Duchess is able to compose new stories and scenarios in which to entangle Quixote.
Quixote and Panza are brought on a boar hunt, and the hunt is interrupted by a procession of devils and sages. Fierce music is played and the enchanted Dulcinea is presented inside of a carriage. A sage proclaims that Dulcinea will only be disenchanted and returned to beauty once Sancho has voluntarily whipped himself 3300 times. Not much later, Countess Trifaldi and her attendants arrive at the castle, having sought Quixote's assistance. They have been cursed with beards, but if Quixote will fly on a wooden horse to battle an evil giant, Malumbruno, the ladies will be restored. Quixote and Sancho are blindfolded when they sit upon Clavileño, the winged wooden horse. The horse is full of firecrackers that go off, lightly injuring the men and throwing them to the ground.
Sancho is made governor of a town but he soon leaves the job. Don Quixote remains at the castle, tortured by cats and by Altisidora, a maiden who has fallen in love with Don Quixote. Doña Rodriguez, one of the duchess' attendants, asks for Don Quixote's assistance, and he ends up agreeing to joust in the defense of her daughter's honor. The joust never occurs, though.
Quixote and Sancho leave the duchess' castle. They are robbed by thieves, though the ringleader, Roque Guinart, restores what was stolen and escorts the two men to Barcelona. In Barcelona, Quixote becomes the laughing-stock of the town, lodging with a nobleman Don Antonio Moreno. Moreno claims to have a talking head that can tell the future and Don Quixote is mesmerized by this creation. Carrasco returns as the Knight of the White Moon, and this time he battles and defeats Don Quixote. Quixote must swear to go home for a year. Quixote decides that he might become a shepherd but he is overwhelmingly depressed.
When Quixote gets home, he takes ill with a fever almost immediately. He regains his senses, disavows chivalry and knight-errantry, and dies.
