Florence joins Molokov and Anatoly at the restaurant, but Freddie is nowhere to be found. Frustrated, Molokov leaves to see if his men can find him. Left alone, Florence and Anatoly, against their better judgment, find they are attracted to one another (Terrace Duet). Freddie bursts in on them and is infuriated at the sight of them kissing.

It is a few days later. Freddie, still burning from what he sees as Florence's betrayal of both him and the memory of her father, is losing the match. When Florence offers some constructive criticism he orders her to get out. Her confusion gives way to anger and resolve as she packs her bags to leave Bangkok and Freddie (Nobody's Side).

In the underground garage of the arena Florence is given a letter from Anatoly by Harper (who, as she had suspected, works for the C.I.A.) stating that Anatoly, in spite of the fact that he is married, wishes to defect because he loves her. Together Anatoly and Florence escape. Upon their arrival at the airport they are faced by members of the press, who question Anatoly's reasons for defecting. He answers them with his stirring Anthem.

ACT II

Two months later, the second half of the World Chess Championship is about to take place in Budapest. The timing of the match coincides with a summit meeting between the United States and the Soviet Union. In the spirit of glasnost, the Soviets have allowed the defector Anatoly to return behind the Iron Curtain to play chess as an American. While a choral group practices for the summit (Hungarian Folk Song) Anatoly asks Florence how it feels to be in Budapest after so many years away. She confesses sadly that although it is her homeland, she has no memory of it; she has only the address of what was once her home and the faint hope that her father may still be alive - Florence encounters Molokov in a church, where he offers to help find her father or at least to find out what became of him. Florence considers the changes she has made in her life over the past two months (Heaven Help My Heart).