Salanio and Salarino are discussing Antonio's bad luck. One of his ships is confirmed sunk off the coast of England.

Shylock enters and chastises the two for their role in the disappearance of his daughter (and money). They scoff at the moneylender and mock his relationship with his daughter. In return, Shylock reminds them about Antonio's bond and the pound of flesh. Clearly, he too has heard of the drowned ship.

As they argue, Shylock delivers perhaps the most memorable lines from the play regarding the equality of Jews and Christians - 'if you wrong us, do we not revenge?'. Shylock has been wronged, and he blames Antonio.

The friends leave for Antonio's as Tubal enters. He tells Shylock that Jessica is in Genoa. In other news, he informs Shylock of another shipwreck - Antonio's - near Tripoli. Shylock is pleased and prepares for his revenge.