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Out on a heath in the storm, Kent tries to maneuver Lear and the Fool into a little cave he's found, where they can have shelter from the storm.
But Lear says he doesn't want to go inside—the violent storm is nothing compared to the "tempest" (storm) in Lear's own mind. Lear laments that his children are such ingrates but decides that it's best not to go there—dwelling on Goneril and Regan will make him go mad.
Lear orders his Fool and Kent to seek shelter and then, delivers a speech about the plight of homelessness, which he now experiences first hand. Lear realizes he has not done enough for disadvantaged people, and swears he will try to assist them more in the future.
The Fool, who has by now entered the hovel, emerges with a shriek. He has found the hovel already occupied by the strange figure of Poor Tom (actually, Edgar in disguise).
Edgar has sunk ever deeply into the role: he begs and wheedles, sings songs, complains about the cold, and generally acts like a madman.
In the presence of Poor Tom's pretend madness, Lear begins to lose his grip on sanity.
He blames Poor Tom's naked misery on Poor Tom's "children."
"He hath no daughters, sir," Kent clarifies, trying to soothe Lear. "Death, traitor!" Lear replies. "Nothing could have subdued nature / to such lowness but his unkind daughters."
(Clearly, Lear is projecting his relationship with Goneril and Regan onto "Poor Tom.")
Staring at Poor Tom's nearly naked and shivering body, Lear begins to philosophize.
Still full of his pity for the poor, Lear asks, "Is man no more than this? Unaccommodated man is no more but such a poor, bare, forked animal as thou art," he says to Edgar.
Having concluded that clothing and social conventions are artificial additions to man's natural state, Lear starts taking off his own clothes.
We interrupt this program for a brain snack: When Ian McKellen got naked as King Lear in the 2007 Royal Shakespeare Company's production of King Lear, he caused quite a commotion, leading some journalists to joke about the wizard's wand. (McKellen played Gandalf in the Lord of the Rings movies.)
The Fool tries to stop Lear, declaring that while he has a hot heart, the rest of his body is still rather cold, and at risk of exposure... in more than one sense of the word.
Gloucester enters the scene and is greeted by a strange speech from his own son, Edgar.
Still, Gloucester doesn't recognize Edgar in the disguise of Poor Tom, and instead seems worried about the king hanging out with beggars. "What, hath your grace no better company?" he asks.
Gloucester informs us that he's come, against instructions and in spite of great threats, to bring Lear in from the storm and provide him with food and fire. Lear cannot be moved, even by the promise of a hot meal.
Lear talks with Poor Tom, calling him a philosopher.
Gloucester laments that Lear has reason to be driven to madness, as his own daughters seek his death.
Gloucester admits he can relate to the King's pain, as he recently lost his dearly beloved son (that would be Edgar, who was framed by the evil-genius Edmund to look like he had plotted against Gloucester's life). Gloucester says the madness of all of this is making him crazy.
Gloucester finally convinces Lear to come out of the elements, but Lear will only go if he can take his fellow naked crazy man into the dark cave.