Lieutenant Commander Philip Francis Queeg arrives early. He is a plump, short man with a habit of playing with two steel balls that he always keeps in a pocket. As Queeg waits on deck to meet De Vriess, he sees the shocking mess of the Caine. Once in the captain's cabin, the two commanding officers exchange small talk. They both avoid mentioning the fact that Queeg is taking over the dubious honor of leading the Caine. Queeg reveals that he doesn't have very much experience in minesweeping or even in command, but he has read all the pertinent literature, and does not feel like he needs a training period to get used to the ship. He wants the transfer of power to be complete within forty-eight hours, which is amazingly quick, especially for an officer of Queeg's inexperience. They talk about the crew. When Queeg comes to Willie's fitness report, De Vriess explains that Willie is a good officer with a lot of potential and that the purpose of the poor report was to punish him for the lost communication. De Vriess says he was planning to change the report before turning it in.
When Willie meets Queeg, Queeg seems to take a liking to Willie. The next day, before he leaves, De Vriess explains that the Caine should be scrap, and so the rules of the regular Navy do not work with her. The ship is dangerous, overused, and severely lacking in living spaces, so the only way to treat the crew is to let them do things as they wish. The enlisted crew gives De Vriess a silver watch. Queeg immediately starts doing things his way. The sailors of the watch must now wear white uniforms and the oil slick on the deck must be cleaned up. He releases Willie from his three day confinement to the ship. He asks Willie to circulate word of an officer's meeting. Willie immediately takes a liking to the new captain for his soft-spoken method and his desire to return the ship to proper Navy appearance and procedure.
At the officer's meeting, Queeg gives a speech explaining that he wants things done not the right way, the wrong way, or the Navy way, but, "my way." When the captain leaves, Gorton, the executive officer, explains the new rule that all three officers of the duty section must be onboard. Queeg tells Keefer to reassume the duties of custodian of the publications log. After arguing, Keefer agrees to reassume the duty for as long as it takes Willie to master the communications manuals. Later that night, Willie asks Keefer for permission to visit Keggs aboard the Moulton. Keefer grants it without the approval of the executive officer, because the Moulton was within the Caine's nest of ships.
Lieutenant Maryk runs into Keefer on the deck while taking a break from a time consuming inventory that had not been done on the Caine for years. Seeing Keefer writing, Maryk says Keefer should hide his writing during the new captain's breaking-in period, but Keefer is defiant. Keefer thinks that Queeg will be good for the ship, but Maryk is still reverent of De Vriess's boat- handling skills and his knack for getting things done. Keefer explains his theory that the war is a chance for the "shoeshiners" of the Navy to have a brief moment of glory.
Gorton calls Keefer to his cabin and scolds him for his nonchalance on duty and for allowing Willie to leave the ship without his permission. Keefer finds that Queeg is the one who is angry with him. Gorton is forced to punish Keefer by quarantining him to the ship for twenty-four hours. Gorton explains that the restriction is from Queeg. An incoming action order distracts them. It says they will be accompanying a convoy to Pago Pago.
Captain Queeg's first test as commanding officer of the Caine comes the day before the ship's scheduled departure for Pago Pago. Queeg makes a major mistake when backing the ship out of its mooring: he scrapes the side of the Moulton, doing damage. The Caine gets grounded on the other side of the channel. Queeg departs from standard procedure and does not report the incident, simply signaling a nearby tug to help them out and flashing an apologetic message to the Moulton. A message arrives from ComServPac asking for an explanation of the morning's accident. Queeg is not shaken by the request, and sends Willie to deliver his response. Willie looks at the letter, in which Queeg passes off the incident as a failure by the engine room to respond to orders. Queeg also says that the officer responsible for the mistake had been relieved.
That night Queeg throws a massive going away party for the officers of the Caine. Another action item from ComServPac arrives, canceling the Caine's mission to Pago Pago and sending the Moulton in her place. Queeg is surprised. The next day he scolds them for not meeting his standards of performance. All is well until one morning a heavy bank of fog falls. Queeg attempts to get the Caine to its target towing duty despite terrible visibility. Stilwell assumes that the captain wants a straight course. Queeg explodes in anger and, while attempting to replace Stilwell, is nearly run over by a battleship. Later that afternoon, Queeg orders Stilwell to turn for home. Queeg then reprimands Urban for his shirttail loose shirttail and fails to give Stilwell the order to straighten up. The ship makes a giant circle, eventually crossing and cutting its own towing line. The ship completes a second full turn before Queeg returns his attention to commanding the ship. Discovering the cut towline, he is perplexed. No one is willing to give him an explanation. Queeg sends a dispatch attributing the loss to a defective towline and ignores his crew's wish to retrieve it, instead setting a course for port. The next day, Queeg is summoned for a personal interview with Captain Grace of ComServPac to explain the mishap.
First impressions of Queeg are mixed. Some characters like him for what he is and some fear him for what he does. Willie immaturely hated De Vriess for bearing down on him and for his inability to keep the Caine up to Navy standards, and he immediately takes a liking to Queeg for his stubborn determination to do things by the book. Willie hopes for a Renaissance of Naval regulation aboard the Caine, not foreseeing the adverse effects of such a change. The other, more experienced, sailors of the Caine see Queeg as an invasive tyrant, robbing them of their former freedoms and destroying their individuality. Tom Keefer takes a particularly harsh view of the captain. After witnessing the target-towing incident, he comments to Maryk in passing, "We're in trouble with this joker, Steve. I'm not fooling."
Queeg is model for the way the Navy wants its officers to do things, but he invariably fails at his tasks anyway. Though De Vriess's ship flouted almost every Navy regulation, it performed its duties perfectly and with great efficiency. Moral on the ship was high and feelings were brotherly between crew, officers, and captain. Queeg does thing strictly by the book, focusing his attention on transforming the ship into a model of Naval perfection in appearance and form. However, he completely ignores the ship's purpose. A clear example of this is Queeg's failure to command the ship because he is too preoccupied with handing out punishments for Urban's shirttail violation. He cuts the towline and does not even realize it because he is so concerned with appearances.
Despite Queeg's high-and-mighty insistence on perfection and responsibility, he does not practice what he preaches. When Queeg mistakenly attempts to begin turning before he is clear of the Moulton's berth, and rips open her deckhouse, he laughs off the incident. He then tries to cover up the grounding. When ComServPac find out about it anyway, he blames the incident on the incompetence of his crew. Whereas Queeg forces his officers to be completely responsible for the mistakes of their departments, often punishing both the offender and the offender's superior, when he himself is forced to explain an incident, he lays the blame on the shoulders of his subordinates.