Anna accompanies Holly to Harry's apartment, where the porter, an actual eye-witness, describes the accident from the upstairs window:

Porter: It happened right down there.
Holly: You saw it?
Porter: Well not saw, heard, heard. I heard the brakes and I got to the window and saw them carry the body to the other side of the Emperor Josef statue.
Holly: Why didn't they bring him in the house?

While they discuss the accident, Anna wanders into Harry's adjoining bedroom that she knows intimately. She combs her hair in front of the mirror and looks at an old photograph of herself -

Holly: Could he have been conscious?...Was he still alive?
Porter: Alive? He couldn't have been alive. Not with his head in the way it was.
Holly: I was told that he did not die at once.
Porter: He was quite dead.
Holly: But this sounds crazy. If he was killed at once, how could he have talked about me and this lady here after he was dead? Why didn't you say all this at the inquest?
Porter: It's better not to be mixed up in things like this.
Holly: Things like what?
Porter: (He shrugs). I was not the only one who did not give evidence.
Holly: Who else?
Porter: Three men helped to carry your friend to the statue.
Holly: Kurtz, the Rumanian, and -
Porter: There was a third man. He didn't give evidence.
Holly: You don't mean the doctor?
Porter: No, no, no. He came later, after they carried him to the Josef statue.
Holly: What did this man look like?
Porter: I didn't see his face. He didn't look up. He was quite ordinary. He might have been just anybody.
Holly: Just anybody.

After Holly discovers more contradictory information - that there were three men who carried the body across the road after the accident (Kurtz, Popescu, and a mysterious 'third man' - not the doctor), he looks down at the pavement through the upstairs window where people walk in the harsh shadows of the night.

A child's ball bounces into the room, followed by a little child Hansel (Herbert Halbik), as Holly pursues his line of questioning and insists that the Porter tell his story to the police. The Porter wants to end the discussion and protect himself: "I should have listened to my wife. She said you were up to no good. Gossip...I have no evidence. I saw nothing. I said nothing. It's not my business." The Porter tells Anna that they must go, and she must not bring the gentleman again - he points towards the door.

As Holly walks Anna home, she suggests: "You shouldn't get mixed up in this...Why don't you leave this town - go home?" And then she is told outside her own apartment that the Police are searching her own room. In Anna's apartment, Calloway and other police are looking through her personal effects and private letters. After Calloway asks to see her papers, Anna is found with identification papers forged by Harry. Martins is annoyed by the police harrassment and tells the hard-bitten Calloway:

Holly: I suppose it wouldn't interest you to know that Harry Lime was murdered? You're too busy. You haven't even bothered to get the complete evidence...And there was a third man there. I suppose that doesn't sound peculiar to you.
Calloway: I'm not interested in whether a racketeer like Lime was killed by his friends or by an accident. The only important thing is that he's dead.

Calloway warns Holly about playing amateur detective, but the Western author is already gathering plot lines for his next novel:

Calloway: Go home, Martins, like a sensible chap. You don't know what you're mixing in. Get the next plane.
Holly: As soon as I get to the bottom of this, I'll get the next plane.
Calloway: Death's at the bottom of everything, Martins. Leave death to the professionals.
Holly: Mind if I use that line in my next Western?

Anna is detained by the British police for having forged papers. She tells Holly why she needed them: "The Russians would claim me. I come from Czechoslovakia." After he reassures her that he will straighten out all the nonsense about Harry, Anna replies: "Sometimes he said I laughed too much." She is taken away to International Police Headquarters as her letters are read in detail.

Holly immediately locates Dr. Winkel's residence and questions him about the accident. Winkel, Lime's "medical adviser," explains how Lime was dead when he arrived and attended by only two friends. Lime was conscious for only a short time while they carried him into the house:

Holly: Was it possible that his death might have been not accidental?...Could he have been pushed, Dr. Winkel?
Winkel: I cannot give an opinion. The injuries to the head and skull would have been the same.

After Anna is released from policy custody that evening, she accompanies Holly to the Casanova Club, where Kurtz makes a living playing the violin in a small ensemble. Kurtz approaches, curious about Holly's investigation to prove the police wrong. Kurtz suggests he speak to Popescu who is now back in town. When Kurtz goes to bring Popescu to speak to him, Holly tells a worn-out Anna about more discrepancies in the accident anecdotes: "That porter said three men carried the body and two of them are here." But Anna is tired of being reminded about Harry.

Popescu, the man who helped Harry fix Anna's papers, explains his version of the car accident:

It was a terrible thing. I was just crossing the road to go to Harry. He and the Baron were on the sidewalk. Maybe if I hadn't started across the road, it wouldn't have happened. I can't help blaming myself and wishing things had been different. Anyway, he saw me and stepped off the sidewalk to meet me, and the truck...it was terrible, Mr. Martins, terrible. I've never seen a man killed before...It was so terribly stupid for a man like Harry to be killed in an ordinary street accident.

Popescu denies knowing of a 'third man' who helped him and Baron Kurtz carry the body - contradicting the Porter's eyewitness account of "three men carrying the body." Holly surmises that "somebody's lying" and his curiosity is again aroused in his investigation of the 'death' of Harry Lime.

Four quick scenes follow. Popescu finishes a phone call: "He will meet us at the bridge, good." At dawn, Kurtz leaves his house surreptitiously. At the same time, Dr. Winkel wheels out his old bicycle and rides away. And Popescu dressed in an overcoat, steps out of his front door. The three men (and another unidentified man) meet in the middle of a bridge to talk together without being overheard.

As Holly paces at the point where Harry was killed in the street, the porter leans down from the upper window in Harry's apartment, calling out: "I am not a bad man. I'd like to tell you something...Come tonight. My wife goes out...Tonight." As the porter turns around after shutting the window, he turns toward the camera with a look of still horror on his face.

The scene dissolves to Anna's room, where she is disturbed by loneliness and the passing of Harry:

It's always bad around this time. He used to look in around six. I've been frightened. I've been alone, without friends and money. But I've never known anything like this. Please talk. Tell me about him.

Holly tells Anna about the Harry he knew and how he idolized Harry's abilities when he was a boy:

Holly: He could fix anything.
Anna: What sort of things?
Holly: Oh, little things, how to put your temperature up before an exam, the best crib, how to avoid this and that.
Anna: He fixed my papers for me. He heard the Russians were repatriating people like me who came from Czechoslovakia. He knew the right person straight away for forging stamps.
Holly: When he was fourteen, he taught me the three card trick. That was growing up fast.
Anna: He never grew up. The world grew up round him, that's all - and buried him.
Holly: Anna, you'll fall in love again.
Anna: Don't you see I don't want to. I don't ever want to.

As they leave her place to go talk to the porter, she tells him: "You know, you ought to find yourself a girl." Things turn complicated when they approach Harry's apartment and learn that the porter has been found dead and murdered - his throat has been cut. The small, moon-faced boy named Hansel pulls at Harry's hand and accuses the "foreigner" of committing the crime. Anna confirms the people's suspicions: "They think you did it." As they hurry away from the scene, the little boy follows at a distance after them, calling out "Papa, papa." Soon, the crowd outside the Porter's doorway follows in close pursuit. They are provoked to believe that Martins was responsible for the murder of the vital witness.

To escape notice, the two buy tickets at a small cinema house and enter the dark theater. Holly tells Anna that they'd better not see each other again. She suggests that he report his findings to the authorities: "Be sensible. Tell Major Calloway." After they separate, Holly summons a taxi outside of his hotel and asks to be taken to the International Headquarters to see Calloway, but the driver pays no attention. As the car gathers speed through the dark narrow streets, Holly believes the driver has orders to kidnap and kill him as they drive toward a destination that is not the International Police Headquarters.

Although Holly is ready to jump when the car screeches to a halt in front of the Cultural Center, the doors open and he is greeted by Crabbit in front of an applauding audience for his Wednesday evening lecture. He realizes he has actually been taken to address the cultural gathering - the members all believe that he is a famous novelist.

Woefully unprepared to answer questions posed by his sophisticated audience, many of them begin to leave the lecture. Holly answers questions with ominous under-meanings posed by Popescu. He plans to write a new novel "based on fact" and titled 'The Third Man':

Popescu: Can I ask is Mr. Martins engaged in a new book?
Holly: Yes, it's called 'The Third Man.'
Popescu: A novel, Mr. Martins?
Holly: It's a murder story. I've just started it. It's based on fact.
Popescu: ...Are you a slow writer, Mr. Martins?
Holly: Not when I get interested.
Popescu: I'd say you were doing something pretty dangerous this time.
Holly: Yes?
Popescu: Mixing fact and fiction.
Holly: Should I make it all fact?
Popescu: Why no, Mr. Martins. I'd say stick to fiction, straight fiction.
Holly: I'm too far along with the book, Mr. Popescu.
Popescu: Haven't you ever scrapped a book, Mr. Martins?
Holly: Never.

In Popescu's company are two thugs who are waiting to confront Holly after the meeting is dismissed. Holly makes a dash up a narrow, spiraling staircase, as the two thugs follow after him. Holly enters into a dark room off the top of the staircase where he finds a parrot on a perch next to the window when he turns on the light. The parrot snaps at his hand as he opens the window and climbs out. Holly evades his pursuers through the rubble and archways of the bombed-out city and manages to get to Calloway's office in the International Police Headquarters. With a handkerchief wrapped around his right hand where the parrot bit him, Holly is berated by Calloway:

Calloway: I told you to go away, Martins. This isn't Santa Fe. I'm not a sheriff and you aren't a cowboy. You've been blundering around with the worst bunch of racketeers in Vienna, your precious Harry's friends, and now you're wanted for murder.
Martins: Put down drunk and disorderly too.
Calloway: I have.

Calloway asks for Lime's file to describe his monstrous racket - the theft of penicillin from the military hospitals, dilution to make it go further, and the drug's sale to patients (including children) through the black market for a profit:

Holly: Are you too busy chasing a few tubes of penicillin to investigate a murder?
Calloway: These were murders. Men with gangrened legs, women in childbirth. And there were children too. They used some of this diluted penicillin against meningitis. The lucky children died. The unlucky ones went off their heads. You can see them now in the mental ward. That was the racket Harry Lime organized.

In a "magic lantern show" (slide show), Calloway shows pictures of a fellow called Harbin, a medical orderly at the General Hospital who worked for Lime and helped him steal the penicillin from the laboratory. With information from Harbin, that led the police as far as Kurtz and Lime. A masterfully-filmed montage of fingerprints, photographs, and other evidence slowly convince Holly that Lime was involved in the illicit penicillin trade, a racket that flourished on illness and produced only destruction.