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When the novel begins in 1873, only Sethe and Denver, her eighteen-year-old daughter, are living in the haunted house at 124 Bluestone Road outside of Cincinnati, Ohio. Baby Suggs, the grandmother has died; Sethe's sons, Howard and Buglar, have run away; and the infant Beloved has been murdered by her mother.
Out of the blue, Paul D, “the last of the Sweet Home men," arrives at the house. Sethe has not seen Paul D in eighteen years, since they were both slaves at the Kentucky plantation called Sweet Home. He flirts with Sethe and tells her he has been walking for the entire eighteen years since he saw her last.
Paul D’s arrival brings back memories for Sethe. She thinks about the five other African slaves who worked with her at Sweet Home, including her husband (Halle), her mother-in-law (Baby Suggs), and the three Pauls (one of whom is Paul D). Sethe then talks with her guest about the hardships they had to endure at Sweet Home, especially after Schoolteacher, a cruel man, took over the management of the plantation and the slaves. Mr. Garner, the plantation owner, had treated the slaves civilly, but he had died, and now Mrs. Garner was ill as well. Unfortunately, Schoolteacher was called in to help. After his arrival, the slaves rebelled and fled the plantation in order to protest the torture and violence to which he subjected them.
Sethe tells Paul D what happened to her when she escaped from Sweet Home. She was pregnant at the time and had no way of taking care of herself or her children. As a result, she gave the children to a stranger in a wagon. When she was found by the nephews of Schoolteacher, they sucked the milk out of her breasts and then whipped her back so badly that she carries permanent scars. A white girl found her in terrible condition and nursed her back to health. She then helped Sethe deliver her second daughter, whom she later named Beloved. Sethe, however, could not bear to think of the baby growing up in slavery and suffering like her mother; therefore, she slits the baby’s throat. She arranges a funeral for the baby, and in the sermon the child is called “Beloved;” the name sticks. When Sethe purchases a headstone for the child, she wants to have “Beloved” engraved on it. In order to pay the engraver, she has sex with him in front of his young son, who wants to learn how to have intercourse.
Paul D is pained to hear Sethe’s story. He realizes how much she has changed since he last saw her eighteen years before. He thinks about her back at Sweet Home and remembers her being pregnant every year after she married Halle. He even remembers her being pregnant at the time of their escape. Paul also thinks about the time when Mrs. Garner sold his brother to pay off some debts. He also remembers the arrival of Schoolteacher and how he beat three of the Sweet Home men and "punched the glittering iron out of Sethe's eyes, leaving two open wells that did not reflect firelight."
As Sethe and Paul D talk, the ghost that haunts the house begins to make things tremble. Paul D yells at the ghost to "hush up." He then grabs the table and swings it around the room while warning the ghost that Sethe has had enough to suffer without enduring ghostly antics. The ghost suddenly disappears.
Sethe and Paul D go upstairs to her bedroom. Denver, left alone downstairs, feels like an outcast. She opens the jar of jelly and pulls the blackened top off a biscuit. She thinks about her brothers and realizes how much she misses them. She also thinks about Baby Suggs and remembers how she used to talk with her. She then thinks about Paul D and feels angry. She resents that he has chased away the ghost of her dead older sister, for it was the only company she had in the house. As Denver eats her biscuits and jelly, she feels miserable.