In an exchange of small talk as they continue walking through the park, Terry learns that Edie attends a "regular college" in Tarrytown that is "run by the Sisters of St. Anne." She is a teacher trainee, and aspires "to be a teacher." As they walk, Edie accidentally drops one of her white mittens. Terry picks it up and cleans it off, but instead of immediately returning it, he holds it, and then puts it on his left hand - as a substitute for getting close to her.

Edie reminds him that "it isn't just brains. It's how you use them." Terry has always been awe-struck by Edie, having first seen her years earlier as a teenager when they went to Catholic school together. He remembers what she was like, with simple observations:

Terry: You know, I've seen you a lot of times before. Remember parochial school out on Pulaski Street? Seven, eight years ago? Your hair, you had your hair, uh...
Edie: In braids.
Terry: Looked like a hunk of rope. And you had wires on your teeth and glasses, everything. I mean, you was really a mess.
Edie: I can get home all right now, thanks. (She removes the glove from his hand.)
Terry: Now listen. Don't get sore. I was just kiddin' ya a little bit. I just needed to tell ya a joke. You grew up very nice.
Edie: Thanks.
Terry: You don't, you don't remember me, do ya?
Edie: I remembered you the first moment I saw you.
Terry: By the nose, huh? (She smiles at him) Well, some people just got faces that stick in your mind.
Edie: I remember you were in trouble all the time.
Terry: Now you got me. Boy, the way those Sisters used to whack me, I don't know what. They thought they was gonna beat an education into me, but I foxed 'em.
Edie: Maybe they just didn't know how to handle you.
Terry: How would you have done it?
Edie: With a little more patience and kindness. That's what makes people mean and difficult. People don't care enough about them.
Terry: Ah, what are you kiddin' me?

He is interested in seeing her again, although he feels unfamiliar, awkward emotions for her during their departure.

When she gets home, her father has already packed her suitcase and made preparations for her return trip to St. Anne's. After witnessing her goodbye from Terry out the window, he tells her that he disapproves of her association with Terry: "A daughter of mine walkin' arm-in-arm with Terry Malloy. Do you know who Terry Malloy is?" He informs her of the thugs Terry is associated with: "He's the kid brother of Charlie the Gent who is Johnny Friendly's right hand and a butcher in a camel hair coat."

Edie tells her father that she sees him differently than the tough exterior appearance he always projects - he has a sensitivity that others cannot see: "He tries to act tough, but there's a look in his eye." Her father knows she has always been soft-hearted and soft-headed: "You think he's one of them cases you're always draggin' into the house and feelin' sorry for. Like that litter of kittens you brought in." And he has worked all his life to shelter her and make life better for her: "And every time I heist a box or a coffee bag I says to myself, that's for Edie, so she can be a teacher or somethin' decent. I promised your Mom, Edie. Don't let her down." Not wanting to be ungrateful, Edie is still stubbornly determined to remain:

...But Pop, I've seen things that I know are so wrong. Now how can I go back to school and keep my mind on things that are just in books, that aren't people living? I'm gonna stay, Pop. And I'm gonna keep on tryin' to find out who is guilty for Joey.

That evening on the tenement rooftop, where Edie looks at Joey's coop, Terry catches sight of her. He proudly talks to her about his fondness for his racing pigeons - the "champion flock of the neighborhood." "I started them Golden Warriors. You might say that I was the original Golden Warrior." Tommy idolizes Terry: "This bum here is my shadow. He thinks I'm a tough man because I boxed pro a lot."

She thanks him for helping to feed Joey's pigeons: "I wouldn't have thought you'd be so interested in pigeons." And then he explains how dangerous a pigeon's life can be:

You know this city's full of hawks? That's a fact. They hang around on the top of the big hotels. And they spot a pigeon in the park. Right down on him.

He proudly takes out one of the larger pigeons from the coop, a lead bird named Swifty that won't let other birds take his top perch.

Edie: Even pigeons aren't peaceful.
Terry: There's one thing about them though, they're very faithful. They get married just like people.
Tommy: Better.
Terry: And they stay that way till one of 'em dies.
Edie: That's nice.

Taking her for a drink of Glockenheimer beer in a "saloon" (with a special entrance for ladies), Terry tells Edie that he used to be a prizefighter, but before that, he was an orphaned kid after his father was killed:

I had to scrap all my life. I might as well get paid for it. When I was a kid, my old man got bumped off and - and never mind how. Then they stuck Charley and me in a dump they called a Children's Home. Oh, boy! That was some home. Well, anyhow, I ran away from there and I fought in the club smokers and peddled papers and Johnny Friendly bought a piece of me...Yes, then, uh, I was goin' pretty good there for awhile. And after that, uh. Well, I don't know, what do you really care? Am I right?

Kind-hearted toward him, Edie expresses a philosophy of life totally foreign to him. He believes in a 'dog-eat-dog' world point of view ("Do it to him before he does it to you"):

Edie: Shouldn't everybody care about everybody else?
Terry: Boy, what a fruitcake you are!
Edie: I mean, isn't everybody a part of everybody else?
Terry: And you really believe that drool?
Edie: Yes, I do.
Terry: ...You wanna hear my philosophy of life? Do it to him before he does it to you.
Edie (complaining): I never met anyone like you. There's not a spark of sentiment or romance or human kindness in your whole body.
Terry: What good does it do ya besides get ya in trouble?
Edie: And when things and people get in your way, you just knock them aside, get rid of them, is that your idea?

Terry still doesn't believe he is responsible for Joey's death - "fixin' him wasn't my idea" although he is allegedly blamed for it:

Edie: You don't believe anybody, do you?
Terry: Listen, down here, it's every man for himself. It's keepin' alive. It's standin' in with the right people, so you got a little bit of change jinglin' in your pocket.
Edie: And if you don't?
Terry: And if you don't - right down.
Edie: That's living like an animal.
Terry: All right, I'd rather live like an animal than end up like -
Edie: Like Joey? Are you afraid to mention his name?

Her brother's name keeps popping up in their conversation. Suddenly, in the film's most touching scene, Edie pleads with him to help find her brother's killer, but he refuses, knowing that his loyalties are with his brother Charley, his steady work, and loyalty to Friendly's mob and its code. But Terry is still deeply touched by her pure request, and disturbed that he can't help her:

Edie: Help me if you can, for God's sakes!
Terry: Edie, I'd like to help, I'd like to help, but there's nothin' I can do.
Edie: All right. I shouldn't have asked you.
Terry: Here, come on, have a little beer. Come on, come on. (He puts the glass to her lips, but she doesn't drink)
Edie: I don't want it. You just stay here and finish your drink.
Terry: Oh, no, no, listen, don't go. I got my whole life to drink. (pause) You sore at me?
Edie (innocently): What for?
Terry: Well, I don't know, for not, for not bein' no help to ya.
Edie (intensely): You would if you could. (She strokes his face gently)

She has deep faith in him and in basic human nature, and this causes him inner pain to hear her. Obviously, he is influenced by her and cares for her, and he begins to feel more guilty, frustrated and responsible for the murder. Gradually, he starts to be persuaded to turn against the union.

On their way out of the bar, they encounter a boisterous wedding reception in progress - in a room decorated with paper streamers. Dreamily, they begin to dance together to the music of the party, and soon are spinning around. Terry grins and jokes with her: "Ah, you dance divinely...The Sisters oughta see you now." Terry draws her to him, and they dance closely together, just as Edie breathlessly shares her dizzying feelings with him while her eyes are closed: "I feel like I'm just floating. Just floating. Just floating." Terry's lips draw near to hers, but they are interrupted before they are able to kiss each other.

One of Johnny's men, Barney (Abe Simon) approaches, ordering Terry to report to his boss immediately: "He just got a call from 'Mr. Upstairs.' (Whispering) Something's gone wrong. He's pretty hot." Before they can leave the bar, Terry is served with a subpoena to testify at the State House at 10 o'clock on Friday morning regarding Joey's murder. Edie asks the angered, pained, and tortured Terry about what he is going to tell the committee, and whether Johnny Friendly and his brother Charley had anything to do with the murder:

Edie: What are you going to do?
Terry: I ain't gonna eat cheese for no cops, and that's for sure.
Edie (intuitively): It was Johnny Friendly who had Joey killed, wasn't it? (Terry doesn't respond) Or he had him killed, or he had something to do with it, didn't he? He and your big brother Charley? (Still no response from Terry) You can't tell me, can you? Because you're part of it. Cause you're just as bad as the worst of them. Tell me the truth, Terry!
Terry: You'd better go back to that school out in daisyland. You're drivin' yourself nuts. You're drivin' me nuts. Quit worryin' about the truth all the time. Worry about yourself.
Edie: I should've known you wouldn't tell me. Pop said Johnny Friendly used to own you. Well, I think he still owns you.

She tells him she believes he is 'owned' by the bosses and insults him - she calls him "a bum":

Edie: No wonder everybody calls you a bum.
Terry (obviously hurt): Don't say that to me. Edie. Don't say that to me now.
Edie: No wonder. No wonder.
Terry: I'm only tryin' to help ya out. I'm tryin' to keep ya from gettin' hurt. What more do ya want me to do?
Edie: Much more!
Terry: Wait a minute.
Edie: Much, much, much more!

Edie runs off, as Terry looks after her - deeply pained.

As he leaves the bar, Charley and Friendly drive up in a car in front of him. They are worried about another informant longshoreman, Kayo Dugan (Pat Henning), who left the parish meeting that Terry had attended. Terry vainly explains that nothing happened: "It was a big nothin'. The priest did all the talking." However, according to Friendly, a half hour after the meeting was broken up, Kayo Dugan went into a secret session with the Crime Commission and "he done all the talking." "Dugan knew thirty-nine pages of our operation," an exasperated Friendly exclaims. Incensed, Friendly produces a bound, 39-page deposition of testimony Dugan gave to the Crime Commission:

Why that crummy pigeon! He ought to have his neck wrung! (To Charley) That's what I get for gettin' mixed up with this punched-out brother of yours. He was all right hangin' around for laughs. But this is business. I don't like anyone goofin' off in our business.

Suddenly, Charley lashes out at Terry for "goin' around" with Joey Doyle's sister: "(To Johnny) Listen Johnny. The Doyle broad. She's got him so he doesn't even know where his feet is anymore. IT'S AN UNHEALTHY RELATIONSHIP." Friendly pressures Terry to keep away from Edie for good:

Get rid of her, unless you're both tired of living. You got her address?

Friendly orders Charley to arrange to "muzzle" Dugan, and then Terry is told that he has lost his "cushy job in the loft. It's down in the hold with the sweat gang till you learn your lesson. See?" Friendly squeezes and roughly twists (and then slaps) Terry's cheek and face. Charley yells: "WISE UP!" After they drive off, Terry is left standing there in the dark.

The next day at the docks, the protesting dock-worker Dugan is part of a crew unloading cases of Irish whiskey from a ship. When a heavy pallet is being raised from the open hatch, Big Mac signals to the operator of the winch above the hatch to drop the load. The cargo net plunges down, spilling the entire heavy load of whiskey boxes into the hold of the ship - the load 'accidentally' crushes and kills Dugan (wearing Joey Doyle's jacket) who is positioned directly under. Deep in the hold of the ship, Father Barry stands over the body of Dugan and gives him his last rites at the death scene.

In a symbolic and memorable scene, Father Barry in a "Sermon on the Docks" retaliates by preaching against apathy and keeping silent. As the men gather around the opening of the hatch, Barry explains that Joey Doyle and Kayo Dugan were killed because they were threatening to expose the racketeering of Johnny Friendly:

Some people think the Crucifixion only took place on Calvary. They better wise up. Takin' Joey Doyle's life to stop him from testifying is a crucifixion. And dropping a sling on Kayo Dugan because he was ready to spill his guts tomorrow - that's a crucifixion. And every time the mob puts the crusher on a good man - tries to stop him from doing his duty as a citizen - it's a crucifixion. And anybody who sits around and lets it happen - keeps silent about something he knows has happened - shares the guilt of it just as much as the Roman soldier who pierced the flesh of Our Lord to see if He was dead.

Although some of the workers react with hostility and yell at him to go back to his church, Father Barry preaches that his church is anywhere that the longshoremen work:

Boys, this is my church! And if you don't think Christ is down here on the waterfront, you've got another guess coming!

One of Friendly's mugs, Truck (Tony Galento), harrasses Father Barry by throwing a rotten banana at him and splattering it all over his shoulder. Terry supports the priest, telling Truck to "let him finish." Ignoring the mob's anger, the Father continues. He believes the longshoremen sell their souls every day to the mob, and he tries to convince them to testify against their employer:

Every morning when the hiring boss blows his whistle, Jesus stands alongside you in the shape-up. He sees why some of you get picked and some of you get passed over. He sees the family men worrying about getting the rent and getting food in the house for the wife and the kids. He sees you selling your souls to the mob for a day's pay.

Another of Friendly's thugs, Barney, hurls an empty beer can at the priest, striking him in the forehead and drawing blood. Pop shouts out a threat: "The next bum that throws somethin' deals with me. I don't care if he's twice my size."

Father Barry then denounces the union bosses who benefit off the labors and kickbacks of the workers. He tells the workers that they should stop doing the bidding of the union bosses while ignoring each other:

And what does Christ think of the easy-money boys who do none of the work and take all of the gravy? And how does he feel about the fellows who wear hundred-and-fifty dollar suits and diamond rings, on your union dues and your kickback money? And how does He, who spoke up without fear against every evil, feel about your silence?

Terry flattens Truck with a punch to the face when he is about to throw another banana at the priest. Johnny Friendly notes that Terry's allegiance and loyalty is gradually being drawn away from the racketeers, due to the persuasiveness of Father Barry.

You want to know what's wrong with our waterfront? It's the love of a lousy buck. It's making the love of the lousy buck - the cushy job - more important than the love of man! It's forgettin' that every fellow down here is your brother in Christ! But remember, Christ is always with you - Christ is in the shape up. He's in the hatch. He's in the union hall. He's kneeling right here beside Dugan. And He's saying with all of you, if you do it to the least of mine, you do it to me! And what they did to Joey, and what they did to Dugan, they're doing to you. And you. You. ALL OF YOU. And only you, only you with God's help, have the power to knock 'em out for good. (Turning toward Dugan's body) Okay, Kayo? Amen. (He makes the sign of the cross).

Father Barry rides the pallet up and out of the hatch with Dugan's body on it when it is hauled up by a crane (heavenward), as the men begin to go back to work.

That night on the rooftop, Edie finds Terry outdoors lying on a mattress, one that he would often use as a bed on hot summer nights. Terry appears troubled and pensive, now that his conscience is being affected. She offers him Joey's jacket (it was returned to her after Dugan's death). Terry believes his pigeons, which are making cooing sounds, are "nervous. There was a hawk around here before." She huddles close to him, and then he tentatively reaches out - his emotions overtaking him. They finally kiss at last, and their bodies press together.

As time progresses, and he develops a growing affection and relationship with Edie and Father Barry, Terry believes he can redeem himself by coming clean through his testimony. When Father Barry leaves the confessional booth in the church the next day, Terry rushes after him, but the priest doesn't want to take his confession. Outside the church, Terry follows again, grabs the priest by the arm, and then confesses that he was involved in setting up Joey Doyle for the murder.

The priest finally stops and listens to Terry, who is relieved to have someone to listen to him. As they take a walk through the park, he tells the tough priest that it only "started out as a favor...I just thought they was gonna lean on him a little bit. I never figured they was gonna knock 'em off. And I tried to tell Edie the other night. I really tried. I wanted to tell her. She's the first nice thing that ever happened to me."

Terry is confident of what would happen to him if he told what he knew about the murder. And he is reluctant to "put the finger" on his own brother and Johnny Friendly, a life-long friend:

Terry: You know, if I spill, my life ain't worth a nickel.
Father Barry: And how much is your soul worth if you don't?...Listen, if I were you, I would walk right...Never mind. I'm not asking you to do anything. It's your own conscience that's got to do the asking.

When Edie appears along the pier wall, Terry also confesses his knowledge to her and admits his involvement in the murder of her brother. A prolonged blast from a ship's whistle drowns out and accentuates his words. She is horrified by what he says. She turns and runs away from him and never turns back.

Up on his rooftop, where he finds Glover, the Crime Commission investigator, they talk about Terry's prizefight at the Garden against Wilson about three or four years earlier. Terry reluctantly admits that he was "doing a favor for a couple of pals of mine" by thowing the fight: "It was all over except for the lousy bet...When those guys want to win a bet, there's nothin' they won't stop at."