George and Lennie arrive at the ranch the next morning. At the bunkhouse, an old man with no right hand and a crippled dog greets them. His name is Candy. He says the boss was angry when they didn't show up last night.
The bunkhouse is a place inhabited by single, lonely men. Candy is a man broken by life and the Depression, dependent on the kindness of the Boss.
The boss enters. George blames the bus driver for their lateness. When the boss asks about their skills, George speaks for Lennie. The boss gets suspicious when Lennie repeats something George says.
Lennie's mental weakness has already made him forget his promise not to speak, foreshadowing more trouble ahead.
The boss has never seen a man go out of his way for another man like George does for Lennie, and suspects that George might be taking advantage of Lennie. George lies, and says that Lennie is his cousin. The boss is still suspicious, but lets them stay.
The boss can't fathom that two men could care for one another. The idea of lasting male friendship is foreign on a ranch where survival is the rule.
After the boss leaves, Lennie asks George if what he said was true. George says they were just lies, and notices that Candy has been listening to their conversation. He tells Candy to mind his own business. Candy assures him he wasn't eavesdropping.
Lennie can't remember his own past. George's feelings of friendship don't extend beyond Lennie. To other men, he tries to project strength.
Curley, the boss's son, enters, looking for his father. Curley, who wears fancy boots, quickly starts picking on Lennie, who refuses to speak. After Curley leaves, Candy says Curley is a lightweight boxer and has a history of picking fights with men larger than him.
Curley is careful to mark himself as richer than other men (through his boots) or stronger (by picking fights with larger men).
Candy adds that Curley has only gotten worse since his recent marriage to a pretty "tart" who flirts with the ranch hands. Candy also reveals that Curley keeps vaseline in his left glove to keep his fingers soft.
The mention of Curley's wife shows the men's fear of women and their effects on men.
When Candy leaves, George tells Lennie to stay away from Curley. Fighting with Curley, he warns, will get them fired. Lennie promises. George again tells Lennie to hide and wait for George in the bushes by the river if he ever gets into trouble at the ranch.
George continues to look out for Lennie, and senses that Curley's macho posturing will wind up a threat to them.
Just then, Curley's wife enters. She is very pretty and wears a lot of makeup. While asking where Curly is, she moves to ensure that she shows off her body.
Curley's wife enjoys threatening the men with her good looks.
Slim tells her that Curley is back at the main house. When she's gone, Lennie calls her "purty." George warns him to stay away from her. Lennie, frightened, begs to leave the ranch. George says first they have to make enough money to buy their own land.
George foresees that Lennie's attraction to feminine softness will again cause trouble, and threaten their dream of a farm.
Slim is a leader and authority among the other ranch hands. After talking to George and Lennie and seeing their friendship, Slim is impressed. He says it's rare to see two men travel together because most people are scared of each other. George agrees that it's better to travel with a friend.
Slim's admiration for George and Lennie's friendship shows how extraordinary that friendship is. It also shows Slim's ability to see beyond the harshness of ranch life.
Carlson, another ranch hand, introduces himself to George and Lennie, then asks Slim about his dog. Slim says she gave birth to nine puppies, but that he had to drown four because there wasn't enough food for them all. Carlson proposes shooting Candy's crippled dog and replacing it with one of the puppies. Lennie wonders if he can get a puppy of his own.
On the ranch during the Depression, the men believe killing the weak protects the weak from prolonged suffering. While killing is therefore seen as mercy, it also means that if you want to live it's crucial that you seem strong.
Curley enters again, looking for his wife. When he leaves, George says he might end up in a fight with Curley himself. The triangle rings, signalling that it's time for dinner.
Curley's wariness about his wife makes George uneasy: he foresees trouble.