At Portia's place in Belmont, we again find Portia with the Prince of Morocco. We finally get the details of her father's scheme for picking her suitor. There are three chests, made of gold, silver and lead respectively, each with an inscription. The gold chest says, "Who chooseth me shall gain what many men desire." The silver reads, "Who chooseth me shall get as much as he deserves." The lead casket reads, "Who chooseth me must give and hazard all he hath." Inside one chest is a picture of Portia; if a suitor chooses (oh, sorry, if a suitor chooseth) the chest with the picture, he can have the girl. Otherwise, he dies old and alone.
Now that he knows all the rules, the Prince of Morocco sets about choosing a chest. He goes over each of the inscriptions and reasons to himself. The lead chest asks the man who chooses it to risk everything; the Prince decides he wouldn't risk everything, or anything really, for plain old lead.
Then he decides the silver chest has better promise, as it says he'll get what he deserves in choosing it. The Prince declares that he has to weigh what he deserves carefully, and he determines that in birth, fortunes, grace, and stature, he deserves Portia. Oh, and because of how much he loves her. He says he could be happy with the silver chest, but he checks out the gold one anyway, as it promises what many men desire. It seems all men desire Portia, as they're coming from every corner of the earth to woo her.
It's time for the Prince to choose. He decides lead is too worthless, and silver is of less worth than gold, so gold is the only thing worthy enough to hold Portia's picture.
When the Prince opens the golden casket, he finds a picture of a Death's head (a skull and crossbones) and a scroll beginning with the famous words, "All that glisters [glitters] is not gold." Essentially, the chiding inscription is saying that what's golden outside isn't always golden inside, and the chooser would've known that had he been as wise as he is bold. Thus the Prince is condemned to a life of solitude and takes his leave quickly and quietly. Portia gladly lets him go.