Autumn 1939. Edward Cazalet goes to meet his mistress Diana at a train station where many children are being evacuated. They later argue over the fact that he will probably be sent away soon.

The Cazalet family gathers to listen to the radio broadcast as the Prime Minister announces that Britain is now at war with Germany. At the end of the speech, William Cazalet kisses all three of his sons. Despite his failing eyesight, he will help run the company with Hugh while Edward will be away. Zoë gets upset when her husband Rupert tells her that he plans to join the navy without waiting to be called up.

Louise wants to train to be an actress, but her mother wants her to go to cookery school instead. Edward decides that his daughter will first do what his wife says but that when she turns seventeen she will have a year to prove herself as an actress. On her way to the school, Louise makes friends with Stella, another student. Zoë tells Rupert that she is pregnant, to his great joy. Her spirits are dampened, however, when he tells her that he will still be joining the navy. When he leaves, only his daughter Clay is there to see him off.

Frank's wife returns and tells him that she has moved in with another man. When Frank refuses to give up their son, she tells him that he is not the father. On Christmas day, the Cazalets gather and celebrate. As they sing carols, Frank goes outside and weeps.

In Spring, Louise auditions for drama school, after which she goes to visit Stella's family. As a treat they take her to the theatre, where, to her great distress, she sees her father and Diana in the audience. Rupert returns home on leave and spends several happy days at home.

Sybil is greatly distressed when her husband Hugh announces that their London residence will be shut for the duration of the War. She is clearly unwell and Hugh is furious when he finds out that she has secretly been taking large numbers of aspirin. She finally goes for tests and tells her daughter she only has an ulcer.

Edward helps rescue the stranded men at Dunkirk and the family gives him a hero's welcome on his return. News arrives that Rupert is feared lost.