Bel-Imperia and Hieronimo enter the scene. Bel-Imperia upbraids Hieronimo for his failure to seek vengeance for his son and questions where his grief has gone. She tells him that if he doesn't avenge Horatio, she will be forced to do so herself. Upon hearing this, Hieronimo realizes that he has an ally. He begs her forgiveness for not acting sooner but resolves, in front of her, that he will kill those who murdered his son. She pledges to help him in any way she can. He simply instructs her to go along with the plan he is about to put into action.
Just at that moment, Balthazar and Lorenzo arrive, and Hieronimo begins to enact his plan. The two ask for Hieronimo's help. Apparently, Hieronimo's entertainment at the feast for the Portuguese Ambassador was such a success that he has been asked to provide the entertainment for the approaching royal wedding. Hieronimo agrees wholeheartedly and says that he has just the play: a tragedy he wrote in his student days at the University of Toledo. He asks each person present (Balthazar, Lorenzo, and Bel-Imperia) to act one of the parts. Balthazar seems initially shocked that Hieronimo suggests they play a tragedy, but eventually he and Lorenzo go along.
Hieronimo then explains the play's plot, which revolves around a knight of Rhodes (Rhodes-or Rodos is a small Greek island in the Mediterranean, conquered by the Turks near the turn of the sixteenth century) and his bride, Perseda. This bride was so beautiful that she drew the love of Soliman, the ruler of Rhodes. Soliman then decided to have the knight killed by his bashaw (a nobleman, or courtier) so that he could marry Perseda. Perseda, instead of marrying Soliman, killed him in revenge and then killed herself.
Lorenzo is utterly impressed by the plot, which ends with the pasha killing himself on a mountaintop. Hieronimo assigns the parts: he will be the murderer, Balthazar will play Soliman, Lorenzo will be the knight of Rhodes, and Bel-Imperia will play Perseda. He then hands out descriptions of each character to the respective actor, descriptions which detail which props and costumes each must wear: Balthazar, a Turkish cap, black mustache and broad, curved sword (falchion); Lorenzo, a cross like a knight of Rhodes; and Bel-Imperia must simply dress herself. Balthazar suggests that a comedy might be better material for a wedding, but his suggestion is spurned by Hieronimo.
Furthermore, Hieronimo dictates that each actor will have to improvise their lines and do so in a foreign language: Lorenzo in Latin, Hieronimo in Greek, Balthazar in Italian, and Bel-Imperia in French. Balthazar reasonably objects that no one will understand the play if they do this, but Hieronimo says that he will explain everything in a concluding speech.
Balthazar remains suspicious, but Lorenzo advises him to appease Hieronimo by going along with his plan. After they leave, Hieronimo contemplates the revenge he is about to obtain.