Hamlet's cray-cray behavior is no news to Claudius. In hopes of finding out what's going on with Hamlet, Claudius and Gertrude have invited two of Hamlet's school friends to Denmark. Rosencrantz and Guildenstern, whom Claudius can't tell apart, promise to report back to the King and Queen with any information they can gather.
Apparently, spying on your children is the thing to do around Denmark.
Speaking of people who spy on their children, Polonius enters. He claims he has found the source of Hamlet's madness, but first, the King really ought to meet his ambassadors.
Voltimand and Cornelius enter, fresh from their Norwegian expedition. Turns out that Claudius is a successful diplomat; he has avoided war with Norway after all. Young Fortinbras (remember him from Act I, Scene i?) has promised his uncle (the current king of Norway) that he'll behave. Fortinbras further says he won't plot to destroy Denmark in order to take back the lands his dead father lost in a bet.
Once that's out of the way, everyone gets back to the moody young Hamlet business. Polonius informs Claudius and Gertrude that Hamlet has been driven mad by love for Ophelia. To prove his point, he reads off some love letters that the Prince wrote about how sexy she is (seriously —an "excellent white bosom").
They decide to… spy on their children. Specifically, they plan to set up a meeting between Hamlet and Ophelia, in the location where Hamlet has taken to pacing insanely, and watch what happens.
The King and Queen give the plan the go-ahead and, seeing Hamlet coming, they quickly rush out of the hall.
Hamlet comes in, deliberately misunderstands Polonius's questions, and says things that seem to be irrelevant. But are they?
Polonius first asks if Hamlet recognizes him, and Hamlet replies he knows him as a "fishmonger" (that's a guy who sells fish but it's also code for "pimp"), which maybe means that Hamlet knows Polonius is using his daughter and her romantic relationship with Hamlet, for personal gain. (Spying for Claudius = getting in good with the king).
Hamlet also quips with Polonius that honest men are rare, and that the sun would breed maggots in a dead dog because that flesh is good enough to be kissed by the sun. He continues by asking if Polonius has a daughter. Polonius confirms this, and Hamlet replies that she should be kept out of the sun, as the sun would likely conceive with her too, thus likening our delicate Ophelia's womb to a dead dog rotting in the sun, which would then breed maggots. Nice!
Polonius, who continues to not get it, doesn't take any offense to this daughter/dead dog comparison, and instead thinks that Hamlet mentioning his daughter is a good sign that he's got her on the mind. He declares in an aside that he, too, was crazy for love when he was young, and thus misses the whole point of Hamlet's offensive speech about rotting and breeding.
Polonius asks what Hamlet is reading, and Hamlet gives a nonsensical explanation about foolish and disgusting old men (now making fun of Polonius for being old). He quips that Polonius would be as old as Hamlet, if time and Polonius went backwards. Polonius, because he's not too clever, thinks there is some very sensible stuff here, only further proving Hamlet's point that Polonius is indeed a foolish man.
Then, Polonius suggests Hamlet should take a walk out in the fresh air, which Hamlet obviously uses as an opportunity to say he'd like to walk out of the fresh air and into his grave.
Polonius yet again interprets Hamlet's deliberately foolish speech to be very sensible. He says men speak more honestly in madness than when they are sane.
Polonius offers to take leave of Hamlet, and Hamlet replies no other loss would make him happier, except the losing of his life.
As Polonius is leaving, Hamlet dismisses him as a tedious old fool: he's fallen into Hamlet's trap of making everyone think that he's mad.
When Rosencrantz and Guildenstern enter, Hamlet figures out pretty quickly that the king and queen arranged their trip.
Hamlet, says he'll make it easy for them: everything sucks, and neither men nor women "delight" him.
Rosencrantz has a bit of a giggle when Hamlet declared that men don't delight him, and Hamlet wants to know what's funny.
Oh, it's just that there are a bunch of actors heading to the castle.
Why are they traveling? Hamlet wonders. Are they not as well loved on their home turf as they used to be?
By way of explanation, Rosencrantz indulges in some theater gossip.
History Snack: This entire passage is an allusion to Shakespeare's day, an era when public theaters were shut down during times of instability —like when the plague got a bit out of control or when there was a civil disturbance.
When Rosencrantz says the actors are on the road because of some recent "inhibition," Shakespeare could be alluding to the Essex Rebellion of 1601. Shakespeare's company was asked to perform the play Richard II on the eve of the Earl of Essex's (unsuccessful) revolt against Queen Elizabeth I. Why? Richard II depicts the usurpation of a monarch (King Richard II), which could be an effective tool for rallying the rebel forces. Shakespeare's taking a little time here to basically create a public service announcement to the Elizabethan audience.
There's now talk about children's plays. (Note: Plays with child actors were all the rage in England at this time, and there's this thing called "the War of the Theaters" between plays written for child actors and those written for adult actors. Shakespeare was on the grown up actors' side, and is making a little jab at the children's plays, especially when Rosencrantz refers to child actors as "little eyases" or, little hawks. He probably just got tired of seeing all those child actors descend into drugs and DUIs.)
Shakespeare takes the chance to make fun of the folks that support the children's plays in Elizabethan England by having Hamlet compare child-play supporters to the men that used to make stupid faces at his Uncle Claudius, and now pay big money for little pictures of him.
Guildenstern distracts Hamlet's attention by saying something like, "Hey —don't hate everyone, here come the actors you love! Over there!"
Before talking to the players, Hamlet declares to Guildenstern that his "uncle-father and aunt-mother" are deceived.
Guildenstern says something along the lines of, "About what?" Then Hamlet makes the comment that he's only mad if the wind blows north-north-west, because otherwise he knows a hawk from a handsaw.
This wind/handsaw business is another one of the crazy comments about not being crazy that is supposed to confirm that actually, Hamlet's crazy.
When Polonius comes in, Hamlet keeps up the whole "I'm crazy" act by addressing Polonius as "Jephthah, judge of Israel." Jephthah is a character from Judges 11, of the King James Bible, who inadvertently offers up his only child, a virgin girl, as human sacrifice in exchange for winning a battle.
But when the players (a.k.a. actors) arrive at the castle, Hamlet is actually super excited to see them.
He asks for a speech he once heard performed; he thinks it was performed no more than once, because the vulgar masses couldn't appreciate it, though he and the critics did. (Hamlet's telling us here that he has a fine artistic sensibility, and a penchant for poetry, unlike the groundlings or, common folks that sat in the cheap seats at plays.)
What speech? It's the tale Aeneas told Dido about Priam's murder, all drawn Virgil's Aeneid. It's a significant story because Pyrrhus, son of the warrior Achilles, comes to Troy in the Trojan horse to avenge the death of his father by killing Priam, King of Troy.
Hm, a son killing a king to avenge his dad?
The speech details Pyrrhus's dark, scary, blood-covered rage. Then we get to Hecuba, Priam's wife, who's pretty upset by the whole thing.
Hamlet starts reciting the speech himself, then lets an actor take over. The actor gets so worked up by the description of Hecuba's emotion at her husband's death that he has tears in his eyes.
Polonius, meanwhile, is super bored, since he only likes the bits with dancing and sex.
Hamlet then has a private confab with the main actor, acting if they can perform The Murder of Gonzago for the court tomorrow night—with the little addition of a speech that Hamlet will write himself. The player agrees. (Hamlet is the prince, after all.)
Left alone, Hamlet berates himself for not yet having avenged his father's murder, in one of the most famous soliloquies... ever. He basically asks how the actor can weep for a fictional character, while he himself does nothing about his own father's very real death.
Hamlet calls himself a coward and a promiscuous woman (seriously) for not having acted on the ghost's revelation. Beyond his cowardice, he's ashamed that even when Heaven and Hell would have him take revenge, he can only prance about and whine.
One thing that's holding him back is the fear that the ghost was lying—since, sometimes the devil takes a pleasing shape to ease a worried mind.
Hamlet decides to have the actors stage a version of his father's death in front of Claudius so he can watch Claudius's reaction.
If Claudius flips out, Hamlet can rest assured that he's guilty.