The Buddha was traveling in Anga1, along with around 500 monks. Anga was one of the "16 Great Countries" listed in the suttas2, lying to the east of the kingdom of Magadha, on the other side of the River Campā, which shared its name with the country's capital city.
The Buddha and his monks had stopped in Campā to stay at the Gaggarā Lotus Pond (named after a queen of the same name). Word of the Buddha's visit was spreading quickly throughout the capital, and his reputation preceded him. "Haven't you heard? The ascetic Gautama, from the Sakya clan, is staying at the lotus pond. They say he is fully-enlightened, and that he teaches gods and humans alike! Anyone able to go and see such a person is fortunate!" Groups of people gathered and set off for the Gaggarā Lotus Pond.
A Brahmin named Sonadanda lived in Campā, on property which had been given to him by King Bimbisāra of Magadha. He was preparing to take a nap, but the movement of these crowds caught his eye. He called for his steward and asked what was happening. This steward brought him up-to-speed, and Sonadanda's interest was piqued. "Go and tell them that the Brahmin Sonadanda would like to join them," he said, "and ask them to wait while I get ready."
At the time, there were around 500 brahmins from abroad staying temporarily in Campā. Gossip obviously spread quickly in this city, because word of Sonadanda's plans to visit the Buddha reached their ears. This troubled them - they felt it was beneath a Brahmin to visit a lowly ascetic. They went to his property in order to try and convince him to stay. "Sonadanda, you are a noble Brahmin, and this Gautama is a lowly ascetic! You are a high-born; you are wealthy; you have studied the Vedas; you are handsome; you are ethical; you're a skilled speaker; you have taught many Brahmin students from many places; you're an elder, and this Gautama is still a young man; you're honored by King Bimbisāra as well as the great Brahmin Pokkharasāti; you live in the capital city on royal grounds! If you two are to meet, he should be the one to honor you with a visit!"
Sonadanda disagreed with all of them. "No, Brahmins, you are wrong. Let me explain why! He, himself, is a high-born; he left the noble life behind, abandoning his clan and all of his riches; he made himself a homeless beggar while in the prime of his youth; he resisted the pleas of his parents, and became a wanderer; he is handsome, ethical, a skilled speaker, and a teacher of many, like me; moreover, he has has abandoned desire for sensual pleasures; he teaches the truth about actions and the fruits they produce; he does not wish harm on us Brahmins; he is a holy man from a noble Khattiya family; people from foreign lands come to him for guidance; he has even been a refuge for thousands of gods!"
He continued, "I have heard what people say of him. They say he is an Arahant, a fully-enlightened Buddha; he is perfected in knowledge and conduct; his body bears the 32 Marks of Great Man; among his many devotees are gods and men alike; anywhere he stays is safe from beasts and spirits; he has earned his reputation through his achievement of knowledge and conduct; even King Bimbisāra is a devotee, along with the king's son, wife, followers, and ministers; King Pasenadi of Kosala and the great Brahmin Pokkharasāti are counted among his disciples, as well!"
He concluded, "He has come as a guest in this city to stay at the lotus pond. Men like him should be honored and revered, so it is only proper for me to be the one to visit him. I have praised him this much, but even this falls short! Truly, he is beyond all praise."
The Brahmins were moved by Sonadanda's praise, and they decided to tag along and meet the Buddha as well. So, a massive crowd of people set out for the lotus pond to meet the Buddha. However, as they reached the far side of the jungle and drew closer to the Buddha, Sonadanda's mind began to race with anxiety and doubt. "What if I ask a stupid question? What if the Buddha asks me a question, and I can't give a good answer? Everyone will think I'm a fool, and this could harm my reputation and my livelihood here in the city... I can't even turn back, because we've come too far... this, too, would make me look foolish..."
The crowd reached the lotus pond, and Sonadanda approached the Buddha. They exchanged polite greetings, and the Brahmin sat down to the Buddha's side. Some of the other people from the crowd also approached the Buddha; some bowed, some exchanged polite greetings, some joined their palms in salutation, and some introduced themselves by announcing their name and their clan. Others simply remained silent.
Sonadanda's mind was still reeling with anxiety. He wished, more than anything, that the Buddha would ask him an easy question - something about the Vedas, his area of expertise as a Brahmin!
The Buddha detected these thoughts in Sonadanda's mind, and so he addressed the Brahmin before everyone present: "Brahmin, how many factors must someone possess for him to be considered a Brahmin?" Sonadanda felt like a weight had been lifted from his shoulders, and speaking with a newfound confidence, he said, "Master Gautama, there are five factors which make someone a Brahmin: he must be high-born on the sides of both parents, with noble ancestry reaching back at least seven generations; he must have memorized the mantras, he must know the Three Vedas and their language, he must know cosmology, and he must know the 32 Marks; he must be handsome; he must be ethical; and he must be learned and wise, being the first or second person to hold the ritual ladle during the sacrifice.3
The Buddha responded with a question: "Is it possible to omit one of these items? Is there anything in this list which we could ignore, and still consider someone a Brahmin?" Sonadanda said, "Yes, I suppose we could leave out the part about being handsome. Someone's appearance isn't really that important."
The Buddha continued this process, working with Sonadanda to "trim the fat" from the list of qualities which make someone a Brahmin - by the end, they had deleted three of the items, leaving only two: being ethical, and being learned and wise. Brilliantly, the Buddha had worked together with Sonadanda in order to completely change the meaning of the word "Brahmin" - they took away all of the qualities which people had no control over, such as their ancestry and their physical beauty. With this new list, a Brahmin was defined by the content of his character, and not his heritage.
Many of the Brahmins in the crowd were upset by this. "Master Sonadanda, don't say this! You're throwing our traditions in the garbage! A Brahmin's appearance, his knowledge of the mantras, and his ancestry are sacred! You've taken up this ascetic Gautama's teachings!" The Buddha stepped in, and said, "Brahmins, if you think Sonadanda is unfit to have this conversation, then let us speak without him. However, if you agree that he is educated and wise, then be quiet and let him speak."
Sonadanda spoke up for himself. "Master Gautama, let me handle this. You can be silent. Brahmins, do not accuse me of condemning Brahmin traditions!" He pointed to someone in the crowd. "This is my nephew, Angaka. He is a handsome Brahmin - his beauty is only rivaled by Master Gautama here. He knows the mantras, and understands the Vedas. I taught him myself! Furthermore, he is of high ancestry. I know his mother and father personally. However, if he were to kill living things, rob and steal, commit adultery, tell lies, and get drunk... what good would these things do him? Could we call him a noble Brahmin? No! It's only when someone is ethical and wise (being the first or second to hold the ritual ladle) that he can rightfully be called a Brahmin."
The Buddha spoke up again. "Sonadanda, could either of these two qualities be ommitted from the list of Brahmin qualities?" Sonadanda shook his head. "No, Master Gautama, because they go hand-in-hand. Wisdom is purified by morality, and morality is purified by wisdom. Just as one hand washes the other, wisdom and morality develop one another. An ethical person must be wise, and a wise person must practice ethics."
The Buddha responded approvingly, "Well said, Brahmin! Can you tell us what is meant by 'ethics' and 'wisdom'?" Sonadanda said, "No, I've said everything that I know. It would be better for you to explain the rest." The Buddha said, "Very well. Listen closely."
Once again, the Sīlakkhandhavagga Pericope is reproduced here. The Buddha explains that everything before the four jhānas corresponds to "ethics." "Wisdom," in this sutta, is covered by the rest of the pericope, from the jhānas to the destruction of the corruptions and attainment of nibbana.4
Sonadanda was delighted, and he praised the Buddha while declaring himself a lay follower. He extended an invitation to the Buddha and the monks for a visit to his house the following day, for a meal offering. The Buddha accepted his offer by remaining silent. The Brahmin rose up, circumambulated the Buddha, and returned home.
He had the meals for the sangha prepared, and had the Buddha informed the offering was ready. The sangha traveled to Sonadanda's home, and he served with his own hands. When the meal was finished, Sonadanda took a low seat to the Buddha's side and said, "Master Gautama, if I were to rise up and bow to you in the presence of a crowd, this could damage my reputation and my livelihood; if the time comes when I salute you with my palms joined together, please take this as if I have risen from my seat. If I take off my turban, please take it as if I have bowed to you. Likewise, if I am in a carriage, and I were to rise from my seat and bow to you, this could damage my reputation and my livelihood. If the time comes when I hold up my goad5, please take it as if I have gotten down from my carriage. And if I lower my hand, please take it as if I have bowed at your feet."
In other words, despite converting, Sonadanda was hesitant to commit fully and was still concerned with what others would think of his devotion to the Buddha, and how this would affect his income.6 All the same, the Buddha welcomed him, and gave him a Dhamma teaching which filled the Brahmin with enthusiasm. Sonadanda then took his leave.
The corresponding sutra from the Chinese Canon is Dīrghāgama 22. I do not have access to a translation of the sutra, so I cannot provide a comparison. I will try to update this section if I ever get the chance.
 In the Buddha's time, Anga was a subject state of Magadha, and the Anga people were, to a large degree, assimilated into the Magadhan kingdom.
 The 16 Great Countries were Aṅga, Magadha, Kāsī, Kosala, Vajjī, Malla, Ceti, Vaṅga, Kuru, Pañcāla, Maccha, Sūrusena, Assaka, Avanti, Gandhāra, and Kamboja. A few decades after the Buddha died, most of these countries were swallowed up into Magadha by the Nanda Dynasty.
 This "ritual ladle" refers to a tool used to pour ghee over the sacrifical fire during Vedic rituals. It remains an important symbol in Hinduism today.
 As Walshe notes, the four jhānas are usually classified as being a "concentration" practice, not "wisdom." For the purposes of this sutta, however, this distinction is not very important.
 This is something like a cattleprod, used to guide the animals pulling the carriage.
 On this point, Walshe references Rhys Davids, pointing out that Sonadanda is not described as achieving any sort of attainment, unlike Pokkharasāti and others who attained the Dhamma-eye after converting.