Sir Toby and Maria argue about his drinking; Sir Andrew Aguecheek is introduced as the foolish knight Sir Toby has brought to court Olivia.
Inside Olivia's house, Sir Toby Belch complains about his niece's grief over her dead brother, dismissing it as excessive. Maria scolds him for his late nights, his drinking, and his habit of bringing home Sir Andrew Aguecheek as a would-be suitor for Olivia. Sir Toby defends Sir Andrew by listing his income (three thousand ducats a year) and his alleged accomplishments.
Sir Andrew enters. Maria is politely contemptuous of him, making jokes he does not catch. He briefly considers leaving Illyria because Olivia will never love him, but Sir Toby insists he stay and court her properly. Sir Andrew is persuaded without much difficulty. He and Sir Toby leave together, and the scene ends with their cheerful noise.
This scene introduces the comic subplot and its primary figures: Sir Toby, the disorder-loving drunk who enjoys Olivia's hospitality without earning it; Maria, the sharp waiting-gentlewoman who sees through everyone; and Sir Andrew, the well-funded fool who is about to be used.
Sir Toby's defence of Sir Andrew is transparently self-interested. He lists Andrew's annual income, not his qualities as a suitor, because Andrew's money is what funds Sir Toby's drinking. His enthusiasm for Sir Andrew's courtship has nothing to do with Andrew's prospects of success. Sir Toby is not cruel in a calculated way; he is simply indifferent to Andrew's actual interests so long as his own comfort is maintained.
Maria's wit establishes her as the scene's sharpest intelligence. She speaks politely while consistently wrong-footing both men. Her contempt for Sir Andrew, delivered in aside and misdirection rather than direct insult, shows the kind of precision she will bring to the forged letter scheme later. She can hit a target without appearing to aim.
Sir Andrew himself is the scene's comic device: rich, vain about qualities he does not possess, easily convinced of things he would otherwise doubt. He is not malicious; he is simply credulous and lonely, which makes him a perfect instrument for whatever scheme Sir Toby wants to run.