Proteus alerts the Duke of Valentine's plan to elope with Silvia. Proteus explains that were it not his "duty" to notify the Duke of this development, he would not betray his friend in such a manner. Proteus is, of course, lying, as his true motivation is his desire for Silvia. The Duke admits that he has known for some while that Valentine has been visiting his daughter's room by means of a ladder, but that he did not want to challenge Valentine and appear ungentlemanly. Proteus begs the Duke to foil Valentine's plot without identifying Proteus as his source.
Valentine rushes through the courtyard, past the Duke, who asks him to stop a while and chat. Valentine is perturbed by this request, but nonetheless stays patiently. The Duke confesses to Valentine that he is frustrated with Silvia for ignoring his wish that she marry Thurio. The widower Duke makes up a story, telling Valentine that he is searching for a new wife to replace the love he once felt for his disobedient daughter. The Duke plans to "turn [Silvia] out to who will take her in./Then let her beauty be her wedding dower,/For me and my possessions she esteems not" (III.i.77-79). The Duke asks Valentine for his advice on how to woo a coy lady from Milan. Valentine embarks on a love lesson befitting of his name. He explains that all women love jewels and that when a woman frowns upon a suitor, it is not out of hatred but out of a desire to make him love her even more. Valentine advises the Duke to visit his ladylove by night, using a "ladder made of cords" to enter her locked chamber. At the Duke's request, Valentine promises to procure such a ladder.
Valentine begins to lose patience as the Duke pesters him with more questions. He asks Valentine how he should convey the ladder to the scene. Exasperated, Valentine says that the Duke could hide it under any cloak. The Duke insists on trying on Valentine's cloak, claiming that he needs to get used to wearing one. While trying on Valentine's cloak, the Duke discovers a letter in the pocket that outlines Valentine's plans to escape with Silvia. The enraged Duke banishes Valentine from his court, leaving Valentine distraught. Proteus comforts Valentine with an exaggerated description of Silvia's mourning and kindly accompanies him out of the Duke's palace.
Launce tells the audience that his master Proteus is a knave. Launce then announces that he himself is in love, though no one knows about it, and shows a letter to Speed listing his beloved's characteristics: she can fetch, carry, milk, sew, brew good ale, knit, wash and scour. She is not without her detriments: she is toothless, and overly fond of liquor, and has illegitimate children and "... more hair than wit, and more faults than/hairs, and more wealth than faults" (III.i.339-340).
The Duke asks Proteus to convince Silvia to fall in love with Thurio. Proteus feigns unwillingness to slander Valentine, but the Duke tells him that since nothing Proteus can say will help Valentine, no words can hurt him either. Proteus asks, "But say this [slandering] weed her love from Valentine,/It follows not that she will love Sir Thurio," hatching his plot to divert Silvia's affections directly to himself (III.ii.49-50). Proteus advises Thurio to gather musicians to sing a sonnet under Silvia's balcony that evening.
The juxtaposition of the respective love pursuits of Proteus and Launce contrasts Proteus' passionate rashness and Launce's methodical practicality. Proteus' pursuit of Silvia is marked by disingenuousness: he claims to act out of a sense of duty, though in reality is motivated solely by his sexual appetite. He not only betrays both Valentine and Julia, but also presents a false front of honor to the Duke. Launce, on the other hand, is straightforward about his reasons for loving his milkmaid: his milkmaid has valuable workwoman's skills and a large dowry. He verbally expresses the same motivations for falling in love that drive the forging of marriages among the upper classes.