Nick is taking the train into New York City with Tom Buchanan. He begins the chapter by describing an area he calls a valley of ashes. It is an area where ashes from coal burning furnaces are deposited. Everything is gray and lifeless, even the people who work and live in the area. Nick describes an old billboard for an optometrist, Doctor T.J. Eckleburg. The billboard features a pair of giant eyes that seem to be gazing down on the people below. This billboard is an important feature of the novel, and is intended to suggest that God is watching this area.

As the train slows down in the Valley, Tom announces that they are getting off so that Nick can meet his mistress. Nick explains that everyone in New York knows about Tom's mistress and that Tom makes no effort at all to keep it a secret that he is cheating on his wife. The two man leave the train and walk to a car repair garage. The owner, George Wilson, seems to know Tom and asks him about a car he may be selling and other business matters. Wilson's wife, Myrtle, is Tom's mistress. She is in her mid-thirties, plump or fleshy, and a bit loud. Tom manages to tell Myrtle that he wants to see her, without Wilson finding out. Nick and Tom leave the garage and get back on a train. Myrtle lies to her husband, telling him she is going to visit her sister and also gets on the train.

Once they get into New York, Nick learns that Tom keeps an apartment for Myrtle. Myrtle calls her sister and some friends and a liquor-fueled party develops in the apartment. Nick, Tom, Myrtle, Myrtle's sister Catherine, and Myrtle's neighbors, Mr. and Mrs. McKee spend the afternoon drinking alcohol and becoming intoxicated. Myrtle grows combative and, while arguing with Tom about his wife, begins to show "Daisy" as loud as she can. Tom hits her, breaking her nose. The guests leave, and the chapter ends with Tom heading back home.