At a camp near the battlefield, Malcolm tells Duncan that the old Thane of Cawdor confessed and repented before being executed. Duncan notes that you can't always trust a man by his outward show. Macbeth, Banquo, Ross, and Angus enter. Duncan says that even the gift of Cawdor is not as much as Macbeth deserves. Macbeth responds: "The service and loyalty I owe, in doing it, pays itself" (1.4.22).
Deeply ironic that just as Duncan comments about how you can't trust people's outward shows, Macbeth enters. Duncan's great strength as a king is his trust in his people and his thanes, but it also makes him vulnerable to treachery.
Duncan is pleased. He says: "I have begun to plant thee, and will labour to make thee full of growing" (1.4.28-29). Next, he announces that Malcolm will be heir to the Scottish throne (the kingship was not hereditary in Scotland at that time). Duncan then adjourns the meeting and decides to spend the night at Inverness, Macbeth's castle.
Duncan thinks of his role as King in terms of what he can give. He's like a gardener in nature; putting his country above his own desires...
Macbeth goes ahead to prepare for the King's visit, but notes that Malcolm now stands between him and the throne. He begs the stars to "hide your fires, let not light see my black and deep desires" (1.4.51).