Nick begins the chapter by describing an incident in which a reporter showed up at Gatsby's door, asking for a comment - he didn't suggest that there was an issue that Gatsby should comment on; the reported only wanted to get some, or any, information. This opening reminds the reader that Gatsby is the subject of speculation and gossip throughout New York.

After describing the incident, Nick notes that he spent some away from Gatsby, and then goes on to recount the true facts of Gatsby's biography. In the chronology of the novel, Nick did not know these details yet, but in looking back on the incidents as the narrator of something that occurred in the past, he did.

Nick provides the following details about Gatsby's "real" background:

- Gatsby's real name is James Gatz

- He was born in North Dakota to "shiftless, unsuccessful farm people"

- He left home when he was young and moved around the west.

- One day he was "loafing" along the shore of Lake Superior when he spotted a yacht in some trouble. In a borrowed rowboat, he went out to the boat and helped its drunken owner, Dan Cody.

- Cody was about 50 years old, and "new rich" from his silver mines. He took Gatsby under his wing and hired him as "steward, mate, skipper, secretary" to protect Cody from his drunken self.

- Cody was Gatsby's mentor and showed him how the wealthy class lived.

- When Cody died he left Gatsby $25,000, but Cody's family cheated him out of it.

- When he met Cody, James Gatz changed his name to Jay Gatsby.

Nick explains that during this time, while he was away from Gatsby, he was spending time with Jordan, and trying to charm her aunt, with whom she lived. One day, however, Nick did go to see Gatsby for tea. While he was there, three people arrived on horseback, including Tom Buchanan, Daisy's husband. Gatsby betrays the fact that he is "new rich" by greeting them overly enthusiastically.

The visitors settle down for drinks and Gatsby tells Tom that he knows his wife, Daisy. The woman in the riding party drinks two alcoholic drinks and tells Gatsby she'd like to come to one of his parties and then invites Gatsby to supper. Gatsby accepts, not realizing that she has had too much to drink and that the invitation is not in earnest. The other man in the party announces that they must be leaving, but the woman invites Gatsby again. When Gatsby excuses himself to get his car to follow them, the man is amazed that Gatsby really thinks he's been invited. The three visitors end up leaving before Gatsby returns.

The following Saturday night, Tom and Daisy arrive at one of Gatsby's parties. Gatsby tries to impress them by pointing out celebrities and insists on introducing Tom as "The Polo Player," which annoys Tom. When it is time for dinner, Tom excuses himself to sit with another woman. Daisy sarcastically offers Tom a pencil, in case he needs to take down her address. Nick relates watching the celebrities at the party through Daisy's eyes. She seems simultaneously impressed by a famous actress and director, and disgusted by the number of people who were obviously not invited. When Tom returns he questions Nick about Gatsby, and suggests he is a bootlegger. Eventually Daisy and Tom leave. Nick waits to visit with Gatsby when the party ends, and Gatsby confesses he feels very far away from Daisy. Nick tells Gatsby, "You can't repeat the past," to which Gatsby replies, "Of course you can."