Eight years have passed and Valjean, having broken his parole and changed his name to Monsieur Madeleine, has risen to become both a factory owner and Mayor. One of his workers, Fantine, has a secret illegitimate child. When the other women discover this, they demand her dismissal. The foreman, whose advances she has rejected, throws her out.

Desperate for money to pay for medicines for her daughter, Fantine sells her locket, her hair, and then joins the whores in selling herself. Utterly degraded by her new trade, she gets into a fight with a prospective customer and is about to be taken to prison by Javert when "The Mayor" arrives and demands she be taken to a hospital instead.

The Mayor then rescues a man pinned down by a runaway cart. Javert is reminded of the abnormal strength of convict 24601 Jean Valjean, a parole-breaker whom he has been tracking for years, but who, he says, has just been recaptured. Valjean, unable to see an innocent man go to prison in his place, confesses to the court that he is prisoner 24601.

At the hospital, Valjean promises the dying Fantine to find and look after her daughter Cosette. Javert arrives to arrest him, but Valjean escapes.