The scene opens with LEONATO, ANTONIO, BEATRICE and HERO talking about men. They observe that DON JOHN was not present at dinner and how melancholy he looks. BEATRICE then introduces her favourite subject, BENEDICK, saying that if she were ever to find an ideal man he would have to be a mix between the two; either a more sedate BENEDICK or a more talkative DON JOHN. ANTONIO and LEONATO despair of her, saying that with her sharp tongue and fussiness she will never find a husband. The men have evidently told the women that DON PEDRO intends to woo HERO.
DON PEDRO, CLAUDIO, BENEDICK, BALTHASAR, DON JOHN, BORACHIO, MARGARET, URSULA and others arrive for the costume ball, all wearing disguises. DON PEDRO leads HERO away to woo her. Servant BALTHASAR and MARGARET flirt, which will become important later in DON JOHN's mischief. URSULA and ANTONIO have a joke. BEATRICE pretends not to know she is speaking to BENEDICK and takes the opportunity to insult him again, knowing that he would have to break disguise if he wanted to insult her back. The others all leave but for DON JOHN, BORACHIO and CLAUDIO. DON JOHN begins his mischief; he pretends to think that CLAUDIO is BENEDICK and tells him that he has overheard DON PEDRO seducing HERO for himself. Naive CLAUDIO is taken in by this and in soliloquy vows not to trust the beauty of women or his friends in matters of love again.
BENEDICK finds CLAUDIO to tell him that the prince has wooed HERO and everything is set. Still being upset and in no mood for BENEDICK's playfulness, CLAUDIO leaves. BENEDICK is not bothered, more interested in himself and how BEATRICE had not recognised him, showing both his pride and how much he wants BEATRICE to notice him.