The scene opens in Gloucester’s house. Baldock speaks with Spencer the younger. In the aftermath of the Earl of Gloucester’s death, Spencer is not currently employed in anyone’s service. Because he wants to ingratiate himself with the king, Spencer says he would prefer to be in the service of Gaveston. Then they speak about the king’s niece, and how overjoyed she must be at Gaveston’s imminent return. She enters with a letter and reads it to them, overcome with joy. She leaves with young Spencer to visit Gaveston. 

To the annoyance of the lords, Edward is preoccupied with Gaveston. He talks about his return incessantly, while important matters of state go ignored. Mortimer and Lancaster find subtle ways to jab and insult Gaveston, masking their insults in poetry. Edwards sees what they are doing and is angry. Gaveston enters the room. Although Edward is delighted to see him, the lords in attendance are sarcastic and haughty. An argument breaks out and then escalates. Young Mortimer wounds Gaveston with a sword. Gaveston leaves with his attendants.

Before leaving the lords, Edward says that their actions will not go unpunished. If it takes an army to subdue them and teach them respect, then he will summon an army.