After the meeting with Henry IV, Donna Matilda is convinced that he recognized her. Both Belcredi and the Doctor try to dissuade her from this notion. Frida and Di Nolli have left to pick up the dress that Donna Matilda is seen wearing in the portrait, and they arrive soon thereafter. Frida enters wearing the dress; she looks identical to her mother's portrait.

Donna Matilda and the Doctor re-enter Henry's room in order to placate him and make him act calmer. After they leave, Henry turns to his valets and tells them that he is tired of acting. They look at him in surprise, and are even more shocked when he reveals that he is perfectly lucid. Henry has been playing the part of the madman for over eight years, having woken out of his madness after twelve years. He and the valets sit around a table and Henry tells them about what it means to be mad, claiming that madmen always speak the truth.

Meanwhile, the Doctor has set up a trap in order to shock Henry IV out of his madness. The portraits have been replaced by Frida and Di Nolli, dressed up to look like the Marchioness and Henry IV. Henry leaves his valets and starts to walk towards his bedroom, passing through the throne room on the way. Frida calls out to him, but she soon becomes frightened and starts to scream. The Doctor, Belcredi, and Donna Matilda all rush in to support her.

Henry watches this scene in amazement. Finally Belcredi and Donna Matilda tell Frida that Henry is cured, and that he has only been acting. It turns out that the valets came to them and confided everything that Henry had secretly told them. Henry explains that after waking up twelve years after the accident, he realized that he was more comfortable playing Henry IV than dealing with changes in the outer world. He therefore pretended to be Henry IV for over eight years.

Henry then discusses the variable nature of reality with them. He explains that since he is aware what mask he is wearing, that of Henry IV, and since he is also aware that other people also wear masks, he is not mad. He explains that madness is when someone wears a mask but is not aware of it. Belcredi comments that according to Henry IV, they are all mad.

After discussing the differences between his reality in which time has stopped and their reality in which it has not, Henry IV goes over to Frida and grabs hold of her. He starts laughing like a madman while hugging her. When the others try to free her, he orders his valets to restrain them. Only Belcredi is able to break free. Belcredi lunges forward, but Henry pulls out his sword and stabs him. In shock, the others carry Belcredi offstage where a loud cry from Donna Matilda indicates that he has died. Henry gather his valets around him and comments that they will now have to stay in the castle forever.

Henry IV: The main sufferer, he lives in a castle and has been assumed to be mad for many years. His delusion was that he was Henry IV of Germany, back in the eleventh century. After waking out of his madness, he decided to keep playing the role.

The Marchioness Matilda Spina: Also known as Donna Matilda, an older woman now, she used to be Henry IV's old flame, the woman he loved.

Frida: The daughter of the Marchioness Matilda Spina, she looks exactly like her mother did at her age. Henry IV feigns madness at the end and tries to kidnap her.

Charles Di Nolli: The young Marquis, engaged to marry Frida. He is the man who has been funding the counselors and the villa so that Henry IV is comfortable in his madness.

Baron Tito Belcredi: The current lover of the Marchioness Matilda Spina, he may be the person that stuck Henry IV's horse, thereby causing the fall that made Henry go mad. He is stabbed by Henry at the end of the play.

Doctor Dionysius Genoni: A physician who has gone along with the group in order to cure Henry IV; his plots instead almost end up making Henry IV go mad for real.

Harold (Frank): One of the valets or private counselors to Henry IV. As a counselor, he pretends to serve Henry IV and helps the guests assume the proper parts in order to maintain the pretense.

Landolph (Lolo): One of the valets or private counselors to Henry IV. As a counselor, he pretends to serve Henry IV and helps the guests assume the proper parts in order to maintain the pretense.

Ordulph (Momo): One of the valets or private counselors to Henry IV. As a counselor, he pretends to serve Henry IV and helps the guests assume the proper parts in order to maintain the pretense.

Berthold (Fino): One of the valets or private counselors to Henry IV, he is a new actor who has just been hired. As a counselor, he pretends to serve Henry IV and helps the guests assume their proper parts in order to maintain the pretense.

John: An old waiter who firmly believes the Henry IV is mad, the four valets and Henry IV allow him to continue believing that Henry is mad even after we learn that he is lucid.

Summary and Analysis of Act I

Summary and Analysis of Act II
Belcredi and the Doctor are engaged in a discussion concerning Henry IV's madness. The Doctor tries to argue that Henry is able to recognize that they are faking their roles, but that his madness makes him believe it is real. Donna Matilda disagrees, claiming that Henry IV clearly recognized her. Both the Doctor and Belcredi argue that it is not possible for him to have been lucid, but she refuses to back down.
The Doctor has planned a risky trick in order to snap Henry IV out of his madness and back into sanity. They are waiting for Di Nolli and Frida to return so that Frida can wear an old dress of her mother's, the same dress that is worn in the portrait. Finally Frida walks in wearing the dress; she is the spitting image of the portrait. Belcredi criticizes the Doctor's plan, which involves making the mother and daughter stand next to each other in similar attire, claiming that it will ruin Henry IV's mind to be so violently pulled out of his delirium.
Landolph arrives and asks them to stand before Henry IV again in order to convince him that the Pope is willing to receive him. Donna Matilda and the Doctor agree and enter Henry's room. Belcredi remains behind and tells Di Nolli that he cannot understand why the phychologists take degrees in medicine when they never cure anyone. He thinks that a law degree would make more sense. While peaking through the keyhole, Belcredi sees the Doctor and Donna Matilda returning along with Henry IV. He, Frida, and Di Nolli rush out of the room.
Henry enters, continuing a conversation he started in the previous room. He then takes Donna Matilda aside and asks her if she loves her daughter, causing her to become confused about whether he is speaking out of madness or in reality. He further tells her to have her daughter, his wife (she is pretending to be his "wife's" mother), come and visit him at his castle.
Once Donna Matilda and the Doctor leave, Henry IV says, "Buffoons, buffoons! One can play any tune on them!" He turns to his counselors and tells them that he is not mad, but merely pretending to be mad. He calls them by their real names, thereby convincing them that he is completely lucid. Henry argues that society labels certain men "mad" because it cannot bear to hear the truths that madmen tell. The counselors gradually grow used to the fact that he is speaking coherently, and Henry finally asks them why they never stopped to realize that they had the perfect life, the life of living in a pre-ordained dream with foreknowledge of the ending.
John, the old servant, arrives in order to take dictation from Henry. Ordolph wants to play a joke on him, but Henry insists on acting his part because he does not want to dissappoint John, who cares deeply about helping him.

Analysis
An interesting feature of this play is that Pirandello speaks out against the Doctor on several occasions. This is probably due to his personal experience with his wife's madness. Belcredi offers us Pirandello's opinion: "I say, I've never understood why they take degrees in medicine." When asks what he means, Belcredi claims that law degrees would be more suitable. He continues by saying that the more the doctors claim they cannot perform miracles, the more people believe in their abilities. The irony is that a miracle is exactly what is needed.
One of the more interesting passages occurs after Donna Matilda and the Doctor leave for the second time. Henry remarks, "And you [the valets] are amazed that I tear off their ridiculous masks now, just as if it wasn't I who had made them mask themselves." He is referring to his ability to not only make the other characters wear masks for him, but also to his sense of being able to peer through all masks. Henry IV states that he is a madman because he is aware of the mask that he wears, whereas everyone else is merely mad because they are not aware of their own masks.
This definition of madmen as men who tell the truth is a continuation of the first act. "Because it's impossible to hear [madmen] speak!" Henry IV is claiming that madmen are labeled mad so that other men can shut them up and not have to listen to them. This is directly related to the fear with which the people present at the masquerade realize that Henry is no longer wearing a mask the way they are. Masks and telling the truth are oppositions; Henry is only able to tell the truth by pretending to be mad.
The action of making the valets get a lamp rather than turn on the electric light is important. "No, it would blind me!" Henry is actually afraid that the electric light would dazzle him by returning him to the real world. He is unequipped to deal with reality, a fact that he later admits as the reason for choosing to feign madness for over eight years. .
Pirandello introduces the concept of the variability of truth in this act. He does this by having John appear. When John the monk arrives, Henry convinces the other valets to pretend everything is "true", when of course it is all fake. This is a form of meta-theater, where they are acting that they are acting for John. The truth thus becomes different for each character on the stage, making it impossible for any one character to know what is real.

Summary and Analysis of Act III
The pictures have been removed from the throne room and Frida and Di Nolli have replaced them, with Frida pretending to be the Marchioness and Di Nolli pretending to be Henry IV. Henry IV enters the room, preparing to go to bed. Frida calls out, "Henry!", causing him to become terror-stricken and think that he is really mad. However, Frida's courage soon gives out and she screams that she is frightened, causing the others to run in and help her.
They have been told by the counselors that Henry has been cured. Henry is furious about the deception and the fact that the Doctor's plot nearly drove him mad again. In order to get some revenge on them, he chooses to pretend that Di Nolli and Frida are in fact the characters they are dressed up to be. Belcredi intimates that Henry is again faking it, and finally Henry asks him what he should do now that he is cured. He tries to make Belcredi understand that there is nothing for him to do in the real world since he has lost twenty years of his life by living in the castle.
Henry tells them that after falling from his horse he was really mad for about twelve years. When he woke up, he realized that he knew nothing of the outer world, and that he had lost his love, had his friends deceive him, and been replaced. He accuses some of his former friends of having pricked his horse, thereby causing it to rear and cause his fall. Henry IV then turns to the Doctor and says that he must be a completely new case for the Doctor to study: a man who chooses to remain mad.
Henry tells them a story about an Irish priest who fell asleep in the sun one day on a park bench. He was dreaming, and when a young boy walked by and brushed his cheek with a flower, the priest woke up, but still looked happy and forgetful of everything around him. Suddenly he straightened up and the look of seriousness returned to his face. Henry then compares his acting the part of Henry IV for all these years with the Irish priest acting his part. He concludes that it is really the other people, such as Belcredi and Donna Matilda, who are mad because they wear a mask everyday but do not realize it.
Henry claims that he is not a madman as they understand madmen, since he can recognize the different realities in which he plays a role. He points to Donna Matilda and tells her that she has lived a different reality from his, and is no longer recognizable in his reality, that of Henry IV. Turning to Frida, Henry informs her that she is part of his reality, that she is his. He takes hold of her and hugs her, laughing like a madman. When the others start to approach him to free Frida, he order the valets to restrain them. Belcredi breaks free of them and lunges towards Henry, who has drawn his sword. Henry stabs Belcredi, mortally wounding him, and the others carry him offstage. After a sharp cry from Donna Matilda, meant to signify Belcredi's death, Henry gathers the valets around him and tells them, "here we are...together...for ever!"

Analysis
The Doctor's climax and ruse turns out to be unnecessary. However, the ruse does have the effect of almost driving Henry mad again. Immediately thereafter Henry talks about the past. This is his way of making an effort to contain time. His fight at the end is fundamentally an effort to avoid a reality where time is flowing. Seeing Frida is in a sense a miracle because she is "resurrected" for him out of his past. Henry's preference for absolute time makes him seize her at the end; he is essentially seizing frozen time.
When Henry IV kills Belcredi, there is a subtle shift in his behavior. He uses the valets for protection, thereby isolating himself in his masquerade of madness. If is now apparent that the murder of Belcredi will force him to be forever caught in his masquerade of madness.
The story of the Irish priest is important in its relation to the concept of masks on face. Henry is trying to explain that the priest had removed his mask for a second, dreamily staring out into space and smiling. However, once he caught himself he immediately put his mask back on. Henry's point is that he is similar to a priest in that he has chosen his mask and wears it diligently. The difference lies in the fact that Henry is completely aware of his mask, whereas the priest was not.
The Doctor's ruse again invokes the concept of variable truths. He creates a double image, a young Henry IV and Marchioness and an old Henry IV and Marchioness. Although unaware of it, the Doctor has really done nothing more than create two false realities. Henry elucidates this when he acknowledges that he immediately knew Di Nolli was not Henry IV, because he himself is Henry IV. However, since both he and Donna Matilda have changed due to time, even they are no longer the real representations of the portraits. This again challenges our sense of reality as created in a world where time is flowing. In many ways, Pirandello is saying that a stage reality is more real than the "real" world.