In the same hotel, a pre-match meeting is held with some bristling on both sides, and various objections. The Arbiter makes his position known ("The Arbiter's Song"). Play begins, and Freddie wins the first game. He interrupts the second with an objection over the yogurt Anatoly is eating, and when the Arbiter doesn't take him seriously, storms out. Florence, Anatoly, Molokov, and the Arbiter are left to pick up the pieces ("Quartet"). After the Arbiter leaves, Anatoly agrees to a meeting that evening at the Generous Sole Terrace Bar.

In Freddie's suite, Florence comes in on the warpath, and bickers with Walter. Freddie arrives and takes credit for all that has happened thus far. As Freddie and Florence argue, Freddie figures out how to win the game he interrupted. Florence is disgusted, and Freddie begins to insinuate that she is on the Russians' side. She snaps out at him, and they argue ("You Wanna Lose Your Only Friend?"). Afterward, Florence leaves and goes to a spa to relax as she ponders her situation ("Nobody's Side").

At the restaurant, Freddie seems to be a no-show. Florence argues with Molokov, and then has banter with Anatoly that leads to her getting upset and going out to the terrace. They meet and kiss ("Terrace Duet"), but Freddie walks in and voices his objections ("Who'd Ever Think It?"). Anatoly tries to apologize, but to no avail.

Florence also tries to apologize, desperately, to Freddie, but he will have none of it. Anatoly calls Florence; in the meantime, Freddie is encountered by Molokov's assistant Nikolai, who wants an autograph. This gives Walter a brilliant idea. There is more bickering between Florence and Freddie before Freddie and Walter leave; Anatoly enters and Florence tries to push him away, but he remains persistent in his pursuit.

Back at the arena, Walter tries to psych Freddie up into playing form ("No Contest") but generally fails. Freddie loses match after match and accuses Florence of sabotage ("Florence Quits" - abbreviated). Freddie, alone and all but defeated, reflects on his broken childhood ("Pity the Child").

Meanwhile, as Florence is about to leave for New York, Walter comes to tell her that Anatoly is defecting to be with her. When she is left alone for a moment, she ponders her bizarre circumstances falling in love with this man ("Heaven Help My Heart"). Walter interrupts the private moment that follows with a mass of reporters; they barrage Anatoly with questions ("Reporters"). Anatoly responds with an internationalist "Anthem."

Later, Florence goes looking for Freddie, but Walter shows up and tells her that he's on his own. He is enjoying "One Night in Bangkok," but gets beaten up by street thugs at the end of the evening.

In a restaurant, Florence and Anatoly try to enjoy their new situation, but Anatoly feels imposed upon by the guards around him at all hours. Some of Anatoly's friends from the Soviet Union come by and are accosted by the guards. He reprimands them, and talks with the friends. It comes out that "Svetlana v Bankokye" - Svetlana is in Bangkok. Florence and Anatoly discuss it, and sing a brief idyll of their love ("You and I").

Anatoly goes to Svetlana's apartment ("You and I" continues), where they discuss Florence and their situation. She goes off angrily and Molokov enters, laying down a heap of blame for Anatoly and threatening his family.

Freddie and Florence meet at midnight on a bridge ("Where I Want to Be / You and I - Reprise"). They discuss Anatoly's current losing streak, and Florence convinces Freddie to ask the Arbiter for a week's postponement so that Anatoly can keep his sanity. Freddie has the meeting in public, claiming migraine headaches; the Arbiter goes to think while "Freddie Goes Metal" to show off to the press before leaving (claiming a headache). On returning, the Arbiter judges that Freddie is playing well enough and offers two aspirin and a glass of water ("The Story of Chess - Reprise"). [Please, don't ask. I don't get it either.]

In a bar, Florence and Svetlana reflect on Anatoly ("I Know Him So Well"). They discuss Anatoly's current problems with finalizing his defection, and bicker until Anatoly enters. He asks Svetlana to make a call for him, and has grown extremely paranoid. Florence tries to console him, but to no real avail.

At a photo shoot, Anatoly shows up to tell Freddie that he is resigning. Freddie refuses the resignation and demands that Anatoly play his best game. So, as the final match is set, there is mystery as to whether or not Anatoly will show up ("Endgame"). Despite Anatoly's dedication, he loses the match to Freddie, who remains champion.

At the airport, Florence and Anatoly say their tearful goodbyes ("You and I - Reprise"). Florence is offered a seat on the plane to Moscow and an apartment there. Walter enters ("Florence and Walter"), offering Florence her old job back for Trumper vs. Sergievsky II, but she chases him out. Torn between the two men, Florence questions whether she can be in "Someone Else's Story." We are never told her decision.