Chapter one of The Great Gatsby introduces the narrator, Nick Carraway, and establishes the context and setting of the novel. Nick begins by explaining his own situation. He has moved from the Midwest to West Egg, a town on Long Island, NY. The novel is set in the years following WWI, and begins in 1922. Nick served in the army in WWI, and now that he is home has decided to move east and try to become a bond trader on Wall Street. Nick is a graduate of Yale, and grew up in a wealthy family. He is what is considered "old rich," and feels he is superior to those who have recently earned great fortunes, the "new rich."

Nick has rented a small house that is nestled between many large mansions. The mansion next door to his house belongs to the title character, Jay Gatsby. There is a large bay in front of Nick's house, and across that bay live Nick's cousin, Daisy and her husband Tom Buchanan.

Nick is invited to Tom and Daisy's for dinner. He discovers that Daisy's husband, Tom, is still as aggressive and assertive as he was when they went to college together. He also learns that Tom is a racist, as he explains a book about white supremacy he's recently read. Nick is happy to see his cousin, Daisy, however, whom he hasn't seen since before the war, and to hear about her life. A fourth character, Jordan Baker, is introduced. Jordan is a professional golfer and she and Nick share a mutual attraction.

The dinner is interrupted several times, however, by the ringing telephone. Tom's mistress calls repeatedly to speak with him, causing him to leave the table several times. At one point Daisy follows after Tom and the couple quarrel.

When he gets back to his own house after dinner, Nick spies his neighbor, Gatsby, for the first time. Gatsby is standing on the lawn, looking at a small green light at the end of the dock at Daisy and Tom's house. Gatsby's arms are stretched out, as though he is reaching for the light.