In the wood, Puck interrogates a fairy who serves the Fairy Queen. When Puck hears that Titania the Queen is coming, he says she better not get within sight of Oberon. Oberon is angry with her because she has a changeling boy (a mortal child stolen by fairies), and Oberon wants the boy as a knight of his train. Titania refuses to give him up, so now, whenever Titania and Oberon meet, they quarrel.
The fairy recognizes Puck as a mischievous sprite known as Robin Goodfellow, and Puck tells of some of the tricks he performs on unsuspecting humans for the amusement of Oberon.
Oberon and Titania enter. Titania says slyly that since Oberon has always been a protector of Hippolyta, she guesses that he is there to bless her marriage to Theseus. Oberon replies that he knows about Titania's love for Theseus, so she is in no position to cast aspersions about him. Titania dismisses his comment, and points out that because she and Oberon have not performed their usual harmonious dances together since the beginning of midsummer, the weather has been terrible. There have been fogs and floods, and farming has been badly affected. It seems more like winter than summer; the seasons have all changed places, and people are confused. She blames their quarrel for all these bad effects in nature. Oberon tells her that the power to make amends lies in her; all he asks is that she give up her changeling boy. Titania refuses, saying that his mother was a member of her order and died giving birth to the boy. Titania now raises him for her sake, and will not give him up.
After Titania exits, Oberon says he will make her suffer because of her defiance. He summons Puck and tells him to fetch him a flower known as "love-in-idleness," explaining that if the juice from that flower is put on the eyelids of a sleeping person, that person will fall madly in love with the next living creature he or she sees. As Puck departs on his errand, Oberon says he will drop the juice from the flower into Titania's eyes as she sleeps, and he will not lift the spell until she has given up the changeling boy.
As Oberon watches, Demetrius enters, with Helena following him. Demetrius impatiently tells Helena to go away and stop following him. He says he cannot love her, but this only has the effect of making her love him more. She says that the more he spurns her, the more she will fawn on him. After more of this, Demetrius says he will run away and leave her to the mercy of wild beasts. When he exits, Helena follows, still determined to pursue him and hoping for a change of heart.
Puck enters, and Oberon takes the flower from him, promising to himself that he will anoint Titania's eyes with it. Then he tells Puck to take the flower and anoint the eyes of Demetrius, at a moment when the next thing he is likely to see will be Helena.
This scene introduces the third plot and the third set of characters. It also sets up the plot that will lead to the comic situations in the wood. The quarrel between Titania and Oberon is significant. In Shakespeare's worldview, disorder at one level of the universe leads to disorder everywhere else, which is why the fairies' quarrel disrupts the normal patterns of weather at the earthly level. Another theme developed in this scene is that of the irrationality of love. The more Helena is scorned, for example, the more she loves. This theme will be developed further through the device of the flower-juice.