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.

Black Beauty is sold to a baker. Although he has good intentions, the baker pays little attention to the horses, and the other workers overload the animals and push them hard. Beauty now must wear the checkrein while pulling heavy loads. When he struggles, he is whipped.

One day a lady stops the driver, Jakes, and asks him to cease whipping Beauty and release the checkrein. Jakes ridicules the idea but does it to please the lady. Jakes is surprised when Beauty pulls the cart better. The lady says humans have an obligation to be good to animals and tells Jakes "we call them dumb animals ... for they cannot tell us how they feel, but they do not suffer less because they have no words." Jakes agrees to release the checkrein on hills, but will not promise to stop using it because the other drivers would laugh at him if he did. To this comment the lady answers, "Is it not better ... to lead a good fashion than to follow a bad one?" Impressed by being spoken to like a gentleman, Jakes does in fact loosen Beauty's rein and removes the checkrein when going uphill. Even so, Beauty gets worn down by all the hard work and is sold to a cab owner.

Beauty also comments on another problem for horses: poorly lit stables. The darkness sensitizes horses' eyes to light, causing considerable pain and difficulty seeing when the horses are exposed to daylight. Had Beauty remained there, he says, he might have lost much of his sight—a condition worse than complete blindness.

The holidays are busy for cab drivers, who work long hours during these times. They have many customers and often must wait outside parties for hours, no matter the weather. One night, Jerry Barker is told to pick up customers at 11 p.m., but they make him wait out in the cold and sleet for more than two hours. They never apologize for being so late and grumble about paying for Jerry's time. The next day, Jerry develops bronchitis and cannot work. He gets worse and is near death but recovers, according to the doctor, in large part because he has abstained from alcohol. Harry Barker cares for the horses, and Governor Grant drives Hotspur, sharing the money he earns with Jerry's family.

Polly exchanges letters with her former mistress, Mrs. Fowler, who offers Jerry a job as coachman when he is well, and Jerry's family can live on her estate. It is wonderful news for the family but bad news for Beauty. Hotspur is easily sold to Governor Grant, but Beauty worries about his future. Polly, Dolly Barker, and Harry Barker are saddened to say goodbye to Beauty, and Beauty never again sees Jerry.

Captain is seriously injured when a drunk driver loses control of his wagon and Jerry's cab tips over. Although Jerry is not seriously injured, Captain is. Furious, Jerry rants about those who put others at risk with their drunkenness. Jerry admits he once drank heavily but broke himself of the habit with help from God and Polly Barker. In spite of Jerry's best efforts, however, Captain will never be right again. Jerry arranges for him to be shot dead to end his misery.

Jerry gets a new horse, Hotspur. Hotspur once belonged to a nobleman but injured himself after running away. Although perfectly healthy and strong, the horse now has scars that render him "no longer fit for a gentleman's stables." Hotspur thinks cab work is demeaning at first, but as he gets used to Jerry, Hotspur tells Black Beauty "an easy mouth and a free hand made up for a great deal." After a week, he adjusts well to life with Jerry and Beauty.

On Election Day Jerry Barker's cab is busy. Just as he stops for lunch, Jerry sees a young woman with a sick child. She is lost and trying to get her boy to the hospital. Jerry offers to drive her for free, but before she can accept, two election workers run up and claim the cab. Their task is more important than the woman's, they claim, and insist Jerry drive them. Jerry refuses, even when they threaten him. Eventually they leave, and Jerry takes the woman and her son to the hospital. The woman thanks Jerry and rushes inside. Jerry then utters the words, "Inasmuch as ye have done it to one of the least of these."

Moments after Jerry drops them off in the pouring rain, a woman in a veil steps out of the hospital and calls for a cab. Recognizing Jerry, she asks after Polly and the children. Beauty learns the woman is Mrs. Fowler, Polly's former mistress. When Mrs. Fowler asks about Jerry's health, he admits he does get sick sometimes, and Mrs. Fowler worries he may grow ill driving a cab in winter weather. She encourages him to contact her if he ever wants a different job.

It is election time. Mr. B—, the candidate from one group, the "blues," wants to hire Jerry Barker's cab to deliver voters to the polls. Jerry says no because he doesn't want political posters on his cab. Nor does he want to drive around to pubs to pick up drunk voters and take them to polling places. Although Jerry agrees with some of the blues' policies, he does not want to be a part of manipulating the vote. Jerry believes "an election is a very serious thing; at least it ought to be." He says the chaos and partisanship around the elections interfere with each man's chance to vote his conscience. Jerry tells Polly Barker that Mr. B— doesn't understand workers' needs and therefore will not vote for him, despite agreeing with some of his ideas.

When Harry Barker criticizes "orange blackguards" who were mean to his sister, Jerry speaks sternly, advising Harry not to attack people based on their political affiliations and praising the boy for defending his sister.