One of the reasons that Gatsby has become so famous around New York is that he throws elaborate parties every weekend at his mansion, lavish spectacles to which people long to be invited. One day, Gatsby’s chauffeur brings Nick an invitation to one of these parties. At the appointed time, Nick makes the short walk to Gatsby’s house and joins the festivities, feeling somewhat out of place amid the throng of jubilant strangers. Guests mill around exchanging rumors about their host—no one seems to know the truth about Gatsby’s wealth or personal history. Nick runs into Jordan Baker, whose friend, Lucille, speculates that Gatsby was a German spy during the war. Nick also hears that Gatsby is a graduate of Oxford and that he once killed a man in cold blood.

Gatsby’s party is almost unbelievably luxurious: guests marvel over his Rolls-Royce, his swimming pool, his beach, crates of fresh oranges and lemons, buffet tents in the gardens overflowing with a feast, and a live orchestra playing under the stars. Liquor flows freely, and the crowd grows rowdier and louder as more and more guests get drunk. In this atmosphere of opulence and revelry, Nick and Jordan, curious about their host, set out to find Gatsby. Instead, they run into a middle-aged man with huge, owl-eyed spectacles (whom Nick dubs Owl Eyes) who sits poring over the unread books in Gatsby’s library.

At midnight, Nick and Jordan go outside to watch the entertainment. They sit at a table with a handsome young man who says that Nick looks familiar to him; they realize that they served in the same division during the war. The man introduces himself as none other than Jay Gatsby. Gatsby’s speech is elaborate and formal, and he has a habit of calling everyone “old sport.” As the party progresses, Nick becomes increasingly fascinated with Gatsby. He notices that Gatsby does not drink and that he keeps himself separate from the party, standing alone on the marble steps, watching his guests in silence.

At two o’clock in the morning, as husbands and wives argue over whether to leave, a butler tells Jordan that Gatsby would like to see her. Jordan emerges from her meeting with Gatsby saying that she has just heard something extraordinary. Nick says goodbye to Gatsby, who goes inside to take a phone call from Philadelphia. Nick starts to walk home. On his way, he sees Owl Eyes struggling to get his car out of a ditch. Owl Eyes and another man climb out of the wrecked automobile, and Owl Eyes drunkenly declares that he washes his hands of the whole business.

Nick then proceeds to describe his everyday life, to prove that he does more with his time than simply attend parties. He works in New York City, through which he also takes long walks, and he meets women. After a brief relationship with a girl from Jersey City, Nick follows the advice of Daisy and Tom and begins seeing Jordan Baker. Nick says that Jordan is fundamentally a dishonest person; he even knows that she cheated in her first golf tournament. Nick feels attracted to her despite her dishonesty, even though he himself claims to be one of the few honest people he has ever known.

At the beginning of this chapter, Gatsby’s party brings 1920s wealth and glamour into full focus, showing the upper class at its most lavishly opulent. The rich, both socialites from East Egg and their coarser counterparts from West Egg, cavort without restraint. As his depiction of the differences between East Egg and West Egg evidences, Fitzgerald is fascinated with the social hierarchy and mood of America in the 1920s, when a large group of industrialists, speculators, and businessmen with brand-new fortunes joined the old, aristocratic families at the top of the economic ladder. The “new rich” lack the refinement, manners, and taste of the “old rich” but long to break into the polite society of the East Eggers. In this scenario, Gatsby is again an enigma—though he lives in a garishly ostentatious West Egg mansion, East Eggers freely attend his parties. Despite the tensions between the two groups, the blend of East and West Egg creates a distinctly American mood. While the Americans at the party possess a rough vitality, the Englishmen there are set off dramatically, seeming desperate and predatory, hoping to make connections that will make them rich.

Fitzgerald has delayed the introduction of the novel’s most important figure—Gatsby himself—until the beginning of Chapter III. The reader has seen Gatsby from a distance, heard other characters talk about him, and listened to Nick’s thoughts about him, but has not actually met him (nor has Nick). Chapter III is devoted to the introduction of Gatsby and the lavish, showy world he inhabits. Fitzgerald gives Gatsby a suitably grand entrance as the aloof host of a spectacularly decadent party. Despite this introduction, this chapter continues to heighten the sense of mystery and enigma that surrounds Gatsby, as the low profile he maintains seems curiously out of place with his lavish expenditures. Just as he stood alone on his lawn in Chapter I, he now stands outside the throng of pleasure-seekers. In his first direct contact with Gatsby, Nick notices his extraordinary smile—“one of those rare smiles with a quality of eternal reassurance in it.” Nick’s impression of Gatsby emphasizes his optimism and vitality—something about him seems remarkably hopeful, and this belief in the brilliance of the future impresses Nick, even before he knows what future Gatsby envisions.

Many aspects of Gatsby’s world are intriguing because they are slightly amiss—for instance, he seems to throw parties at which he knows none of his guests. His accent seems affected, and his habit of calling people “old sport” is hard to place. One of his guests, Owl Eyes, is surprised to find that his books are real and not just empty covers designed to create the appearance of a great library. The tone of Nick’s narration suggests that many of the inhabitants of East Egg and West Egg use an outward show of opulence to cover up their inner corruption and moral decay, but Gatsby seems to use his opulence to mask something entirely different and perhaps more profound. From this chapter forward, the mystery of Jay Gatsby becomes the motivating question of the book, and the unraveling of Gatsby’s character becomes one of its central mechanisms. One early clue to Gatsby’s character in this chapter is his mysterious conversation with Jordan Baker. Though Nick does not know what Gatsby says to her, the fact that Jordan now knows something “remarkable” about Gatsby means that a part of the solution to the enigma of Gatsby is now loose among Nick’s circle of acquaintances.

Chapter III also focuses on the gap between perception and reality. At the party, as he looks through Gatsby’s books, Owl Eyes states that Gatsby has captured the effect of theater, a kind of mingling of honesty and dishonesty that characterizes Gatsby’s approach to this dimension of his life. The party itself is a kind of elaborate theatrical presentation, and Owl Eyes suggests that Gatsby’s whole life is merely a show, believing that even his books might not be real. The novel’s title itself—The Great Gatsby—is suggestive of the sort of vaudeville billing for a performer or magician like “The Great Houdini,” subtly emphasizing the theatrical and perhaps illusory quality of Gatsby’s life.

Nick’s description of his life in New York likewise calls attention to the difference between substance and appearance, as it emphasizes both the colorful allure of the city and its dangerous lack of balance: he says that the city has an “adventurous feel,” but he also calls it “racy,” a word with negative moral connotations. Nick feels similarly conflicted about Jordan. He realizes that she is dishonest, selfish, and cynical, but he is attracted to her vitality nevertheless. Their budding relationship emphasizes the extent to which Nick becomes acclimated to life in the East, abandoning his Midwestern values and concerns in order to take advantage of the excitement of his new surroundings.