Kovalyov finds the Inspector of Police who, having gorged himself on food offered to him as bribes, is about to take a postprandial nap. He is not pleased about being interrupted and, in response to Kovalyov's tale of woe, says that no respectable person would lose his nose. Insulted by this attack on his rank and social position, Kovalyov stalks out in dignified outrage and returns to his home. There he broods over the loss of his nose, saying that it would have been much less embarrassing to lose an arm or a leg; even if he had lost his nose in battle, he wouldn't feel so ridiculous. He tries to figure out how his nose could have left his face, eventually settling on witchcraft as the most likely explanation. He suspects a society matron- Mrs. Grigoryevna- of being responsible because he wouldn't marry her daughter.
Just then, a policeman arrives at Kovalyov's door; it just happens to be the same officer who the baker met at the bridge in Part I. He asks if Kovalyov is the gentleman who lost his nose. Kovalyov admits that he is and the officer tells him that it has been found. It was attempting to leave the country by stagecoach, using the passport of a civil servant. Peering at him closely, the officer realized that he was actually a nose and detained him. He tells Kovalyov that he thinks the baker, whom he also suspects of drunkenness, is somehow responsible. The officer unwraps the nose and returns it to a jubilant Kovalyov, who gives him a reward.
After the officer leaves, Kovalyov examines his nose and finds it undamaged, so he rushes to the mirror and tries to reattach it to his face. To his dismay, it won't stay on no matter what he tries. In desperation, he sends his servant out for the doctor. The doctor examines him and tells Kovalyov that he can't fix it, and that trying to might cause more problems. Kovalyov can't accept this; he mixes in the best society and is expected at two soirees this very day. How can he make an appearance with no nose? He begs the doctor to try to reattach it, offering him a large sum of money to do it. The doctor refuses, telling Kovalyov to let nature take its course, and then leaves.
Not knowing what else to do, Kovalyov writes a letter to Mrs. Grigoryevna, telling her that he knows she is responsible for his nose running about disguised as a civil servant, and demanding that she remove the black magic which she has used on him. He gets a letter in reply from a clearly confused and mystified Mrs. Grigoryevna, who indignantly denies having any knowledge of this strange affair, or of having consorted with his nose on any occasion. Recognizing the truth of her words, Kovalyov is left without any idea as to how his nose left his face and, more important, how to get it back on.
Meanwhile, rumours about the nose's escapades have started to circulate about the town and naturally these rumours get embroidered and exaggerated. People begin to say that the nose can be seen taking a stroll along Nevsky Avenue every day, and crowds start to gather along the street daily, attempting to catch a glimpse of it. Vendors cash in, selling snacks and renting prime viewing spots. Then someone says that the nose has been seen walking in Tavrichesky Park, and the crowds migrate there. Possible nose sightings become a staple of conversation in every level of society.