Farmer Thoroughgood and Willie sell Beauty to the Blomefield sisters for use as a carriage horse. Their groom comes to handle the new horse. He questions the farmer about selling a horse with damaged knees, but the farmer insists Beauty has a good temper and is totally safe.

At Beauty's new home, the groom begins to work with him and notices how much this horse is like one he once knew called Black Beauty. When the groom finally realizes it is indeed Beauty, he is delighted. The groom is Joe Green, who cared for Beauty back at Squire Gordon's many years ago. He vows to take good care of Beauty forever. Joe tells his employers about Black Beauty. Miss Ellen Blomefield offers to write to Mrs. Gordon and tell her of Beauty's fate. They give Beauty his old name back and promise they will never sell him. Beauty is happy to know he has found a forever home.

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At the sale Beauty finds himself in the midst of "old, broken-down horses" and potential buyers who "looked not much better off than the poor beasts they were bargaining about." Many people examine Beauty but do not buy him. Finally, a farmer and his grandson spend a long while looking at him. The farmer says Beauty has good breeding. The grandson is convinced Beauty is salvageable and points out his good points. The farmer is slowly convinced to purchase Beauty.

Farmer Thoroughgood is now Beauty's new owner, thanks to his grandson Willie. Willie spends a lot of time caring for Beauty, whom he calls "Old Crony." With a lot of rest in a pasture and plenty of good food, Beauty recovers his strength and is able to work again. Eventually the farmer and Willie begin to look for a new home for Beauty.

Beauty is now part of the large cab company for which Seedy Sam, in Chapter 39, worked. Its owner is a cruel man, Nicholas Skinner. Beauty's driver is equally cruel, and the horse is worked much too hard and whipped until he bleeds. One day a family tries to hire Beauty's cab, but the young daughter of the family says Beauty looks too weak and should rest. She wants to hire a second cab to carry part of their load. She is overruled, and they take Beauty's cab, piled with the family's luggage. Beauty collapses on the drive.

When Beauty makes it back to Skinner's stables, a farrier examines him and diagnoses his main problem as overwork. With six months' rest, Beauty would be fit and able to work again. But Skinner would rather sell him for meat than let him rest. When the farrier tells Skinner of a horse sale at which Beauty could fetch a better price, Skinner begrudgingly agrees to feed and care for Beauty properly and try to sell him to a new owner. Twelve days later Beauty, hopeful of improving his lot, is taken to the sale.