At the Garter Inn, Bardolph asks the Host if the German guests may borrow three of the Host's horses, because they are on their way to court to meet their Duke. The Host agrees reluctantly.
At Ford's house, Ford, Page, Mistress Ford, Mistress Page, and Evans talk. The women have told their husbands about their plots against Falstaff, and Ford asks his wife to forgive him. He says that he will never doubt her again. Page suggests that they continue with the sport and try to plan a public humiliation of Falstaff. Mistress Page recalls an old tale about ghostly Herne the hunter, a vicious spirit known to visit a particular oak tree at midnight in winter. Many fear to walk by Herne's oak tree at night still.
Mistress Ford sees her drift. She says they should get Falstaff to go to the oak tree disguised as Herne. Then their sons and daughters will come out of hiding, all dressed up as elves and goblins, to encircle Falstaff and pinch him. They can ask Falstaff leading questions that will get him to reveal why he came to the woods at that time. When he admits his dishonorable intentions, they can mock him openly in Windsor.
The men like this plan, especially Page, who imagines that he can use the ensuing confusion as an opportunity for Slender to elope with Anne Page. Ford says that he will go to Falstaff as Brooke to find out if he plans to accept the third invitation from Mistress Ford. Evans goes off to prepare the children's costumes. And Mistress Page considers that she can conveniently get Caius to elope with Anne when they are all in disguise.
The Host enters the Garter Inn with Simple. Simple wants to see Falstaff, but he thought he saw a fat woman going to his room and doesn't want to interrupt. Worried that Falstaff is being robbed, they go to Falstaff's room. Falstaff says that the fat witch is gone. Simple and the Host ask if the old lady had any predictions about them; Falstaff makes up ambiguous replies that reveal nothing.
Bardolph enters, covered with mud. He says that the Germans ran off and stole the Host's horses. Evans enters and tells the Host that he should watch out, as he's heard reports that three German men have been stealing horses in neighboring towns. Then Caius enters and announces that he should not bother making preparations for the arrival of a duke of Germany, as that man doesn't exist. The Host is upset, realizing that someone has tricked him and he has lost three horses. Falstaff comments that the whole world seems to be having bad luck, for he has, too, and been beaten besides.