As Cardinal Wolsey has lost his chance to be Pope with King Henry's decision to go to war against France, a new accord with Spain and Queen Katherine's nephew Charles, Holy Roman Emperor, offers him fresh hope. Thomas More is knighted by Henry, and charged with destroying any copies of the Lutheran "heresy" he can seize, obviously paining More (although he, too, considers it heretical). Princess Mary's engagement to the Dauphin of France is broken off in favour of a marriage to Charles of Spain; and Henry's elder sister, Princess Margaret, is to marry the King of Portugal. Charles Brandon, Henry's friend, is made Duke of Suffolk in order to be able to escort her to Portugal. Meanwhile, Anne Boleyn encounters Henry face-to-face for the first time at a masquerade, leaving a distinct impression on him.

King Henry is stunned by a reversal in his alliance with Emperor Charles and forced to look elsewhere for European support, while Anne Boleyn refuses his offer of mistress status, inflaming his desire to marry her. Katherine of Aragon's alliance with Charles and her hatred for Cardinal Wolsey intensify. Charles Brandon and the newly-widowed Margaret Tudor marry secretly, which infuriates the King, and he banishes both of them from court. Henry bestows a Dukedom on his bastard son Henry FitzRoy, but is heartbroken when FitzRoy dies only weeks later.