Chapter four opens with an update on the world outside of Animal Farm. News of the rebellion has spread across England, along with the singing of Beasts of England. The song quickly spreads, and soon animals all over the country are acting in rebellious ways and heard singing the song, which makes people fearful of a larger animal rebellion.

     Mr. Jones spends most of his time drinking and complaining to other farmers about the injustice he has suffered, and eventually Jones and his men, along with some from the neighbouring farms of Foxwood and Pinchfield make an attempt to recapture the farm. Being warned of this, Snowball quickly puts into place defensive measures, and when the men arrive, the animals defeat them in a several pronged ambush. During the battle, Jones fires his gun, grazing Snowball and killing one of the sheep. Boxer the horse believes he has killed a man, and feels remorse, but later it is discovered the man was only stunned and managed to escape. After all is settled, the animals have a ceremony, and name this day the Battle of the Cowshed.

     After the Battle of the Cowshed, Mollie, who hid in her stable during the battle, is seen to exhibit strange behaviour. She's always avoiding work, and Clover is sure she saw Mollie standing near the fence letting a man stroke her nose. When Mollie's stall is inspected, sugar and ribbons are found stashed away, and days later Mollie disappears from the farm to go live as a pampered and obedient animal.

     During the winter, Snowball and Napoleon's disagreements come to a head. Snowball wants the animals to build a windmill that will reduce their work and provide electrical power in the future, while Napoleon believes they should focus their efforts on increasing food production. At the meeting where this decision will be put to vote, Snowball speaks eloquently about how his plans for the windmill will provide electricity and running water for the farm. Once Snowball is finished, Napoleon lets out a sound that signals a pack of huge dogs to come in and chase Snowball away, who barely escapes with his life. The rest of the animals realize these are the puppies Napoleon took away to raise on his own, and they now obey him the way the other dogs used to obey Jones.

     Napoleon uses Squealer to convince the other animals that Snowball was a dangerous criminal, and declares that weekly meetings will no longer occur, and future decisions will be settled by a special committee of pigs. Napoleon reveals several weeks later that the animals will indeed go ahead with building the windmill.

     The animals begin construction on the windmill, which is very difficult work, and causes some other areas of the farm to suffer. A need also begins to arise for items the animals can't make, and this causes Napoleon to declare that they will engage in trade with the neighbouring farms, by the sale of hay, wheat, and eggs. When a man named Whymper begins visiting the farm to trade with Napoleon, the animals seem to recall making resolutions against trade and dealing with humans, but Squealer assures them they are remembering incorrectly, or that these were lies circulated by Snowball. Another sudden change comes when the pigs move into the farmhouse and being sleeping in beds, which the other animals also seem to remember a resolution against. Squealer reasons this away by saying they would never sleep in beds with sheets, but beds without are no different than the hay in their stalls.

     In autumn, when the windmill is partially built, a violent storm passes through, and the following morning the windmill is in ruins. Napoleon immediately blames the destruction on Snowball, and pronounces a death sentence upon Snowball, with a reward to any animal who captures him.

     Through the winter, the animals work hard to rebuild the windmill, and suffer through food shortages. Aware that the outside world is watching, Napoleon uses tricks to make the farm seem to have an abundance of food when Whymper comes to trade. In order to buy more grain, it is decreed more eggs must be sold, and when the hens angrily protest, their rations are withheld, resulting in nine deaths.

     Rumours circulate that Snowball is visiting the farm at night, and soon anything wrong is blamed on Snowball's nighttime mischief and sabotage. Eventually Squealer announces that evidence has been found proving Snowball was in league with Jones since the rebellion. Remembering Snowball fighting bravely at the Battle of the Cowshed, the other animals express disbelief, especially Boxer, but Squealer spins a story that Napoleon was in fact the hero of the battle.

     Several days later, Napoleon orders an assembly and has his dogs kill four pigs who have been vocally opposed to him in the past. He then demands confessions out of any other guilty animals, and many confess their sins against the farm - which they say Snowball urged them to do - and are executed on the spot. After this slaughter, the remaining animals are disheartened, and slink away to sleep together. Boxer does not understand what is happening, but decides that the solution must be to work even harder than before. While the animals sadly sing Beasts of England, they are visited by Squealer who declares the song abolished, as it is no longer needed.