Lear, his Fool, a Gentleman, and his other followers arrive at Gloucester's castle. Confused not to have found Regan at home, and not to have been informed of her departure, Lear grows infuriated when he sees Kent in the stocks, demanding to know who put him there. Kent explains that Regan and Cornwall themselves are responsible. Lear storms off into the palace to find them. While he is away, Kent asks why Lear has so few attendants with him. The Fool mocks Kent for asking such a stupid question.
Lear comes closer to the brink of madness upon seeing his messenger abused by his own other daughter—particularly as, in the order of the court, such an act is a direct insult to Lear himself.
Lear returns with Gloucester, in disbelief, as Gloucester has explained to him that Cornwall and Regan have been informed of Lear's arrival but decline to see him. Lear exclaims: "My breath and blood!" (116-7). As he attempts to calm himself, Gloucester returns inside. Finally, Gloucester persuades Cornwall and Regan to come out with him.
Regan's initial refusal to see Lear parallels Goneril's coldness to him in 1.4. Lear is shocked that his child, bound to him not only by her legal inheritance but in her (animal) body of "breath and blood" would insult him in this way.
Having freed Kent from the stocks, Cornwall and Regan receive Lear. Lear explains his grievances against Goneril. However, Regan takes her sister's side: "O sir, you are old." (165). Insisting that he should be ruled by someone who "discerns [his] state" (168) better than he can, Regan encourages Lear to return to Goneril's house and ask for her forgiveness. Lear is incredulous: what should he do, apologize for his age? As Cornwall joins in reproaching Lear, Lear curses Goneril—insisting, however, that he will never curse Regan in this manner because she knows better what the "offices of nature, bond of childhood" (202) are.
When Regan reveals herself as having just as little regard for both her father's age and the responsibilities following from the "bond of childhood" as Goneril exhibited in 1.4, the extent of Lear's misjudgment (and blindness) in 1.1 becomes increasingly clear.
Oswald appears, announcing Goneril's arrival. Continuing to rave with displeasure at Kent's having been put in the stocks, Lear asks the gods to take his side and to help preserve his sanity. When Goneril herself shows up, she defends her behavior; Regan tells Lear to accept Goneril's terms, dismissing half of his hundred men and return to Goneril. Lear says that he would rather "abjure all roofs, and choose […] to be a comrade with the wolf and owl" (241-3). Goneril says coldly that the decision is up to him.
Lear's invoking of the heavens to preserve his sanity explicitly opposes the order of the stars and the gods to the disorder taking place on earth. When Lear further states that he would rather revert to the state of an animal without shelter ("comrade with the wolf and owl") he suggests that perhaps nature has more intrinsic justice than family bonds of law or affection.
Lear begs Goneril not to drive him mad. She can wait; he will be patient and stay with Regan, with his hundred knights. Regan, however, interjects that he should not make this assumption. Indeed, she thinks it is unsafe for him to keep as many as fifty followers in her household; she will allow him twenty-five. Responding that "wicked creatures yet do look well-favored/ when others are more wicked" (294-5), Lear throws himself back on Goneril: now, however, she says she does not understand why he needs twenty-five, ten, or five in a household where she has so many servants that she will tell to serve him. In fact, Regan questions why he even needs one.
As they bring down the numbers of knights that Lear is allowed to keep, without concern for their own ingratitude or injustice to their father, Regan and Goneril systematically reduce him to "nothing" (as the Fool called him in 1.4), stripping him of his remaining power and authority with shocking speed.
Lear responds with outrage, saying that what he needs is not the point: "Allow not nature more than nature needs,/ Man's life is cheap as beasts" (307-8). Begging for divine justice and for the gods to bear witness to how he has been wronged, he says he will have revenge on these "unnatural hags" (320): "I will do such things--/ What they are yet I know not, but they shall be/ The terrors of the earth!) (323-5). Once again, he insists that he will not weep, and fears that he will go mad. He exits with Kent and his Fool. Gloucester follows them.
While his speech descends into self-interruption and incoherence ("I will do such things") Lear makes the strong point that a life defined only by needs is no more than animal life. Calling his daughters "unnatural hags" he finally sees them as neither human nor animal: they have violated the laws of love, duty, and of nature itself.
A storm is beginning, Cornwall encourages the group to come inside, but Regan points out that there is no space for all of Lear's followers in Gloucester's house. Regan and Goneril agree that they will receive Lear himself, but not one follower. Gloucester, returns, reporting that Lear is in a high rage, raving around outdoors. Goneril says that they will not beg him to stay, but Gloucester is worried about the storm—there is no shelter for miles. Pitiless, Regan says that Lear has earned whatever suffering he comes by and Cornwall urges Gloucestre to shut the doors of his castle.
By effectively throwing Lear out of the house into extreme, dangerous natural conditions, Goneril and Regan reduce him to the animal state that he describes above (i.e., the state of need). Doing this in Gloucester's palace, they effectively use their authority to violate the usual order of hospitality. In response, Lear begins to go fully mad.