We meet Roderigo and Iago, having a spat on a street in Venice, Italy. We, the audience, have just walked in on the conversation, so we're not exactly clear about why they're fighting, yet. We learn that Roderigo has been doling out cash to Iago, and that he's now upset about some news Iago has delivered.
Roderigo, referring to this news, says, "I thought you hated him!" and Iago says, "Of course, I hate him!" and we're asking, "Who the heck are you guys talking about?" and Shakespeare says, "In good time, grasshoppers."
Iago explains his reason to hate this "him." Iago got three of Venice's VIPs to advocate to "him," asking "him" to make Iago a lieutenant. Iago knows he's worthy of the position, if he does say so himself, but the mystery man apparently rebuffed the VIPs and said he'd already chosen a lieutenant, another guy named Michael Cassio.
Iago is displeased, especially because this Cassio is a numbers guy, a great arithmetician who has no knowledge of battle except for what he's read. Iago believes that Cassio will be useless in war.
Iago is peeved that he's basically still an ancient (or ensign, meaning the lowly ranked guy who carries the flag of an army in war) instead of second-in-command to the Moor, Othello. So now we've learned that the "him" is a black man who is a general in the Venetian army. Just to be clear, Othello is the one who passed Iago over for the lieutenant position. (FYI: throughout this entire first scene, Othello is only referred to as "the Moor" and never by personal name. In keeping with the original text, we'll refer to Othello as "the Moor" for this first scene.)
Iago complains more that people gain advancement because they're smart and loved, instead of reasons of seniority. He's bitter. Still, Iago promises he'll get his revenge: he'll pretend to love the Moor and do service to him, but he plans to betray this Moor the first chance he gets. Iago declares, "I am not what I am," which is a perfect introduction to this treacherous, lying jerk-o-saur.
After Roderigo makes some nasty racial comments about the Moor, Iago suggests that they go now to "her father" and make a big scene at his place. Roderigo and Iago thus show up under the sleeping Brabantio's window, making quite the ruckus. They proclaim that Brabantio should watch out for thieves—and for his daughter.
Brabantio comes to the window in a fury, ready to shoo off what sounds like drunken idiots making noise under his window while he's trying to sleep. Iago, hidden by the night, proclaims that Brabantio's heart should be broken, as half of his soul is stolen. Iago declares to him that "an old black ram is tupping your white ewe."
Roderigo realizes that Brabantio doesn't recognize his voice, so he declares it's him, Roderigo. Brabantio then clues in and tells him to get lost. He's told Roderigo before that his daughter has no interest in marrying him, so would the drunken, fat Roderigo please leave his window and stop stalking his daughter?
Roderigo and the hidden Iago continue to mock Brabantio about his daughter. They yell that they might be drunk, but they have news. Even as the men are hollering out of the windows, they say that Brabantio's daughter is being promiscuous with the Moor.
Roderigo insists that Brabantio's daughter has run off to the Moor's bed, and he tells Brabantio to check and see whether his daughter is actually in her room, if he doesn't believe him.
As Brabantio sets off to see if his daughter is safe in her bed, Iago tells Roderigo that he'll be leaving now. It won't look good if he (Iago) is found with Roderigo, plotting the Moor's demise, when he's supposed to be on the Moor's side.
Iago notes that while the state may not like the Moor's behavior, the state can't afford to get rid of him right now. The state has recently entered into war in Cyprus, and no one can rival Othello as a general. Basically, they need him, even if they don't like him personally.
Iago tells Roderigo that, at the moment, he's got to see the Moor, but he'll meet Roderigo later at this pub, the Sagitarry, where he'll be with the Moor.
After Iago has left, Brabantio returns in a rage. His daughter is indeed gone. Brabantio wonders aloud whether the girl has married the Moor.
Roderigo confirms the two are likely married, and Brabantio declares that men should trust their daughters' actions and not what their daughters say.
Brabantio then insists that the Moor must've tricked his daughter, enchanting the girl to fall in love with him. In frustration, Brabantio says he wishes Roderigo had married his daughter after all. Roderigo then graciously agrees to go with Brabantio on a hunt to find this wayward girl. They'll even get the whole neighborhood involved.