The war is throwing Florence into chaos. Piero, Cosimo's only son, is eager to fight. Meanwhile, Cosimo manages to "buy" the withdrawal of Milan's troops, thus saving the city, but in the meantime Florence has again fallen into the plague.

Albizzi has managed to foment the citizenry against Cosimo, accusing him of the crime of usury. When Cosimo learns of the situation, he decides to return to Florence. Albizzi then invents a ploy to get Cosimo arrested and held for trial.

From prison, Cosimo asks Contessina to try bribing a member of the Signoria, to buy votes in his favor. Albizzi starts poisoning Cosimo's food through his prison guard. Contessina negotiates exile rather than the death penalty.

While the Medici are in exile in Venice, the situation deteriorates day by day in Florence, with Albizzi imposing his rule over a city gravely depleted by the absence of the Medici.

The return of the Medici to Florence is an out-and-out triumph, with Albizzi in prison for his attempt to become the city's "tyrant".

The Signoria now has a vacant chair, and Cosimo is asked to choose who should occupy it. Piero thinks that his moment has now come, but the banker Pazzi, too, has his eyes set on that seat.

Pazzi has managed to convince the Pope to remove the Medici as Church bankers, but Cosimo is disinclined to surrender what he has worked so hard to attain.