During his journey to London, Oliver encounters Jack Dawkins, a pickpocket more commonly known by the nickname the "Artful Dodger", although Oliver's innocent nature prevents him from recognising this hint that the boy may be dishonest. Grateful for the unexpected assistance, Oliver follows Dodger to the "old gentleman"'s residence. In this way, Oliver unwittingly falls in with an infamous Jewish criminal known as Fagin, the so-called gentleman of whom the Artful Dodger spoke. Ensnared, Oliver lives with Fagin and his gang of juvenile pickpockets in their lair at Saffron Hill for some time, unaware of their criminal occupations. He believes they make wallets and handkerchiefs.
Later, Oliver naïvely goes out to "make handkerchiefs" Dodger and Charley steal the handkerchief of an old gentleman named Mr. Brownlow, and promptly flee. When he finds his handkerchief missing, Mr. Brownlow turns round, sees Oliver, and pursues him. Others join the chase and Oliver is caught and taken before the magistrate. Curiously, Mr. Brownlow has second thoughts about the boy—he seems reluctant to believe he is a pickpocket. To the judge's evident disappointment, a bookstall holder who saw Dodger commit the crime clears Oliver, who, by now actually ill, faints in the courtroom. Mr. Brownlow takes Oliver home and, along with his housekeeper Mrs. Bedwin, cares for him.