At the prison, the Provost makes Pompey an offer he can't refuse. If Pompey agrees to be his assistant executioner, his prison sentence will be reduced and he'll get to go home.
Pompey cracks a dirty joke about chopping off a man's head and cutting off a woman's "maidenhead" (virginity) and then agrees to the deal.
Pompey points out how strange it is that it's illegal for him to be a bawd, but it's completely legal for him to be an executioner.
Abhorson (the head executioner) enters and declares that Pompey's status as a pimp will bring shame to professional executioners everywhere.
Pompey and Abhorson argue about whether or not pimps and hangmen can be considered professions that require specialized skills.
Pompey and Abhorson run off to train Pompey for his new job.
The Duke (still pretending to be a friar) shows up at the prison and asks the Provost if Angelo still wants Claudio to be executed in the morning. He does.
A Messenger arrives and the Duke is hopeful that he brings news that Claudio will be spared. Yet, the Messenger brings word from Angelo that Claudio's execution is still on for 4pm the next day. (Yep. This means that Angelo is prepared to break his promise to Isabella.)
The Duke asks the Provost to delay Claudio's execution for four days while he hatches a plan, but the Provost says he can't do it without Angelo finding out because Angelo has requested proof of Claudio's death. (The Provost is supposed to deliver Claudio's head after it's been lopped off.)
The Duke convinces the Provost to execute another prisoner, Barnardine, in Claudio's place. If they shave Barnardine's head and trim his beard, nobody will know it's not Claudio because "death's a great disguiser." (Hmm. Are we supposed to notice that this substitution plan sounds a lot like the Duke's bed trick? See what we have to say about this in "Symbolism, Imagery, Allegory" if you want to know more about this.)
The Provost is skeptical but the Duke convinces him that he won't get into trouble.