Romeo has gone into hiding at Friar Laurence's. The Friar updates him on the Tybalt situation.
The Friar wants him to see this as good news (primarily because Romeo will not be executed), but Romeo is devastated. He can't stand the thought of being away from Juliet.
As such, he claims that banishment is worse than death.
There's a knock at the door. It may be the Prince's men.
The Friar tells Romeo to hide.
Luckily, it's only the Nurse at the door. She and the Friar try to deal with Romeo, who's such a mess that he threatens to stab himself out of guilt for hurting Juliet.
The Friar comes up with a plan that's better because it doesn't involve suicide: Romeo and Juliet can have one night together before Romeo leaves Verona. Later, he promises, they'll be able to figure out a way to get Romeo pardoned by the Prince so he can come back to Verona and make his marriage to Juliet public knowledge.
Hearing this plan, Romeo recovers and runs off to see Juliet.