After finding out about Jini and Eunho, Cha storms to the courtesan's school in anger. Jini is humiliated by Cha, while Baekmu is severely burned while trying to protect Jini.
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At the appeal from Eunho who declared that he will marry Jini, Su says it will be considered and sends him home. When he leaves, Su orders that Jini shall be arrested immediately.
To keep her chastity for Eunho, Jini declares to Baekmu that she will become a water maid, instead of a courtesan. Baekmu accepts it and suggests a test to Jini.
Eunho hands the token of eternal love to Jini, who cries the tears of joy. At home, Eunho declares his decision that throws back Cha.
After finding out about Jini and Eunho, Cha storms to the courtesan's school in anger. Jini is humiliated by Cha, while Baekmu is severely burned while trying to protect Jini.
Jini opens her heart to Eunho's true love and they love each other dearly. In the meantime, the city government issues an order to select the courtesans for the feast, and Suman mentions Jini.
Eunho circles around the government to find his beloved Jini. Finally, he meets her, but he is humiliated in front her when he was found to be one of the thieves.
After much hardship, Jini is admitted to the courtesan's school and meets her mother Hyeongeum. But her mother denies that Jini is her daughter, trying not to pass down the life as a courtesan. However, Jini is hurt by her mother's denial.
Yeong is heartbroken that he has become the person who only makes life difficult for Raon. He asks Byeongyeon to let him see Raon once more, and Raon meets him just to say goodbye. She pretends as if she became a eunuch on purpose as a rebel so that Yeong would forget about her and not feel apologetic for marrying someone else.
The Crown Prince finds out that Eunuch Hong is actually Hong Gyeongnae's daughter, but he cannot believe she approached him on purpose as a spy. He feels so lost and betrayed that he doesn't know what to do. Meanwhile, Raon is also in pain because of the fact that she has to stay far away from him for everyone's sake.
Raon finds out that she is Hong Gyeongnae's daughter and realizes she can never be safe in the palace. Without telling Yeong the truth, she spends the day with him and leaves quietly. Meanwhile, the officials start searching out the Baekwoon Group's spies, especially Hong Gyeongnae's daughter who is said to be residing in the palace.
Premier Kim's servant discovers that Hong Gyeongnae's daughter is called Hong Raon and she is currently in the palace. Knowing Eunuch Hong is Raon, Yunseong secretly gets rid of him and warns the Crown Prince that she needs to leave the palace as soon as possible. However, Yeong is determined to go through any hardships to be with her.
The King persuades Yeong that he must marry Minister Cho's daughter to have more people on his side. Raon also persuades him to marry her since she doesn't want to cause any harm to him. The decision seems to be inevitable if he wants to keep his promise to become a king who always considers the best for the nation and the people.
Raon tells Yeong a story about the mermaid who falls in love with a prince and turns into sea-foam in the end. Both of them realize that they will eventually become like the mermaid and the prince since Yeong has to marry someone whose family can give him political power and Raon has to pretend she'd be all right and disappear.
Yeong continues to postpone the national exam to stop the corruption, which leads to more deepened conflicts with Kim Heon. Even students who have been preparing the exam address an appeal to the king. Meanwhile, having heard that Yeong would treat her as a lady, Raon starts to avoid him.
King Sukjong calls the Chief Inspector and orders him to help him make Prince Yeoning king. Meanwhile, the Patriarchs have decided to support Prince Yeonryeong. The Minister of Personnel persuades Prince Yeoning to withdraw his testimony and indict Jeong Seok for instigating false testimony. Prince Yeoning feels hopeless about the whole situation and has to testify again.
Prince Yeoning decides to testify at the Supreme Court of Saheonbu. He confesses that he substituted for Tae Pyeong at the state exam and asks to be exiled for this crime. The officials, however, do not want to believe his accusations of Prince Milpoong. The Head of Saheonbu decides to arrest Prince Milpoong, and everything seems to go as planned.
The relation between Prince Yeoning and Tae Pyeong remains a mystery. The inspectors of Saheonbu are determined to investigate the murder of Yeo Ok and prove that Prince Milpoong is guilty. Meanwhile, Yeo Ji steals a box from Prince Milpoong supposedly containing valuable evidence. Prince Yeonryeong does not want to use illegal force to stop Milpoong from coming to power.
Prince Yeoning is a prince discriminated against because of his mother's peasant background. He returns to Hanyang to support Prince Yeonryeong take the throne against the tyrannic Prince Milpoong, who would do anything to take power. The Saheonbu is determined to uncover Prince Milpoong's crimes and bring justice to the kingdom. The power struggle between the Patriarchs and Disciples is just beginning.
Master Youngshil and Prince Hwikyung try to crown Seonu as a new king of Silla, but Seonu swears his allegiance to the King with the other Hwarangs. Seonu has agreed to support Jidwi and promised to eliminate those who are against him because he has realized that they dream of the same future of Silla.
Master Hwikyung has finished preparing to make Seonu a new king and is waiting for his decision. To protect those people who are weak, kind, injured, and abandoned, he makes up his mind to become king. Meanwhile, Jidwi finds out about who Seonu really is only after he claims to take the throne.
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