Daniel Deronda meets the beautiful, extravagant Gwendolen in Germany and witnesses her great gambling losses which contribute to her family's bankruptcy. He then intervenes when she means to pawn her necklace, and the story splits, to narrate their two separate histories.

Eliot's only novel set in her contemporary Victorian society, Daniel Deronda was a controversial work of moral and social questioning, which explored Jewish Zionism and Kaballism.