Sebastian and Antonio enter. Sebastian thanks Antonio for catching up with him and Antonio answers he was motivated not only by his love for him but also the fear of what might happen to him, a stranger in this place which is often “rough and inhospitable”. However, this explanation is not very convincing, as a moment later, when Sebastian sutest some sight-seeing, Antonio answers that he can’t be seen to much in this city, because he did a lot of damage to Duke Orsino’s galley during the last sea battle – damage, he explains, not in terms of lost lives but in monetary terms. However, he still has not paid back what he took then and so he might be in grave danger if apprehended. So he gives his purse to Sebastian, encouraging him to go on a shopping spree, and he himself is going to hide himself in an inn, whose address he tells Sebastian.
Olivia enters, thinking anxiously about Cesario’s impending visit and how she should woo him. She tells Maria to call Malvolio, who is “sad and civil” and would thus suit her mood, but Maria warns her he is acting strange. Malvolio enters in yellow stockings with crossed garters, smiling and alluding to “Olivia’s” love-letter, which of course the real Olivia does not know and has no idea what he is talking about.