In the garden, Hero instructs her attendant Margaret as to her plan to make Beatrice fall in love with Benedick. Hero and Ursula, her other attendant, will walk up and down the alley in the garden, while Beatrice, alerted by Margaret, is to overhear them. Margaret leaves to fetch Beatrice, and Hero instructs Ursula. When the two women notice that Beatrice has hidden herself, Hero confirms that Claudio told her how mad Benedick is in love with Beatrice. She holds that telling Beatrice would not be a good idea, seeing that her cousin is obviously incapable of love and would only make fun of poor Benedick. They go on praising Benedick, until they feel sure Beatrice is "limed". Left alone with her thoughts, Beatrice at once decides to bid "Contempt, farewell! And maiden pride, adieu!" and promises to requite Benedick's love.
Don Pedro, Claudio, Benedick and Leonato meet in the guest house. Benedick informs the gentlemen that he is not the same as he has been, and Claudio at once guesses that he must be in love, because he has shaved off his beard and takes great care to look fashionable. When Don Pedro teases him affectionately, Benedick leaves to talk to Leonato. Don John enters and asks to speak to Don Pedro and Claudio. He states that he has proof of Hero being unfaithful to Claudio and invites the gentlemen to watch her being with her other lover in her room. Claudio is outraged and affirms that, if he witnesses Hero being disloyal, he will disgrace her in public before their wedding. Don Pedro agrees to assist him.
In the street in front of Leonato's house, Dogberry, the town's master constable and his assistant Verges are speaking to several men in order to decide on a watch for the street this night. Seacoal and two other watches are chosen and instructed not to let anyone pass. Dogberry also bids them to keep an eye on Leonato's gate, where everybody is busy preparing the marriage. As he and Verges leave, Borachio and Conrade enter. Borachio boasts that he has just earned a lot of money from Don John. Seacoal overhears them and, suspecting some treason going on, asks his fellow watches to stay hidden. One of them identifies Borachio as having "been a vile thief this seven year". Borachio goes on to tell Conrade about the success of their recent intrigue: Don John had indeed brought Don Pedro and Claudio to Hero's window, where they watched a goodnight-scene between Borachio and Margarete, mistaking the latter for Hero. Claudio had left enraged, swearing to shame her and cancel their wedding. At this moment of Borachio's narrative, the watches step forward and arrest the two followers of Don John.
In Hero's room, the bride dresses for her wedding, being assisted by Margarete and Beatrice. The latter states that she feels very ill, whereupon Hero and Margarete mock her, punning on her being in love with Benedick and the name of a medicine, carduus benedictus. They all exit as Hero is fetched for church.
Dogberry and Verges meet Leonato in a room in his house. After having beaten around the bush for some time, the two policemen finally tell the governor of the two rogues in their custody since the night before. They suggest to question them in front of Leonato, but the latter, being short of time due to his daughter's marriage, asks them to do it by themselves and let him know of the results.