The thus far anonymous pilgrim saves Isaac's life and is rewarded with the horse and armour to become the masked knight. He then defeats Sir Brian de Bois Guilbert at a jousting tournament and takes Gurth as his squire. Returning from an errand to Isaac, Gurth is waylaid by a band of outlaws.

Gurth fights for his purse. At the tournament, the masked knight shows his favour to Rowena. The masked knight, with the help of the Black Knight defeats Sir Brian de Bois Guilbert. On the command of Prince John, the identity of the masked knight is revealed and in the ensuing shocked reaction of the crowd, the knight disappears with the help of Isaac and Rebecca.

A fortunate interruption saves Ivanhoe. Sir Brian seeks refuge for himself and Rebecca at Templestowe Abbey even though women and especially non-Christians are forbidden and the Grand Master is arriving shortly. The Normans trailing the outlaws are intercepted and Cedric and Rowena set off for Coningsburgh. Isaac makes a deal to rescue Rebecca.

Rebecca is found guilty and awaits her fate. The Black Knight reveals his identity to all and Prince John is exiled to Aquitaine. Sir Brian considers a way out for himself and Rebecca but the Preceptor has another solution. The Saxons gather at Coningsburgh for Athelstane's funeral. On the day of Rebecca's execution a knight rides to the rescue and Sir Brian realises that at the end of the joust, either he or Rebecca will have a way out.