Sir Toby Belch and Sir Andrew Aguecheek are up late, eating and drinking in a room in Olivia's house. Feste soon joins them, and they are all raucously singing together, when Maria shows up. Maria warns them that if they aren't quiet, Olivia will have Malvolio throw them out of the house. Sir Toby responds that he is Olivia's relative and she will do no such thing. They continue singing.
Malvolio enters and berates the group for treating his "lady's house" like an "ale-house" (2.3.83-4). Sir Toby retorts that Malvolio is just a steward and should not expect others to follow his strict standards of behavior. Furious, Malvolio yells at Maria that if she respected her mistress, she would reprimand these lowlifes. Threatening to tell Olivia everything, he storms off. Maria is annoyed at Malvolio, but begs Sir Toby and Sir Andrew to quiet down because ever since Olivia saw Cesario earlier that day, she has been badly distressed.
Malvolio, proud and self-righteous, objects to how the other servants' make his high-class household look common. He fears that if the household looks common, he will look common. In contrast, Maria shows concern for Olivia's well-being. Maria's comment about Olivia's distress hints that Olivia is now racked with love-melancholy for Cesario.
Maria then says she has a great idea for a prank on Malvolio. She boasts that she can imitate Olivia's handwriting perfectly, and will drop in Malvolio's way a love letter that Malvolio, in his arrogance, will assume is from Olivia to him. Meanwhile, Sir Toby, Sir Andrew, and Feste will get to watch how Malvolio reacts.
This prank offers a counterpoint to the ceremonies and love-games that Orsino, Cesario, and Olivia have been playing so far—it particularly parallels and mocks the carefully scripted love letters that Orsino sent by messenger to Olivia.
Maria leaves to go to bed. Sir Andrew notes approvingly that she is a good woman. Toby agrees. Andrew once again laments that he needs more money in order to stay in Illyria and continue wooing Olivia. Sir Toby reassures Sir Andrew that he will win Olivia's affections in the end.
The rest of the scene establishes that Toby is as interested in Maria as she is in Toby. Andrew's dwindling funds also highlight another aspect of wooing and love-games that the idealistic nobles ignore: wooing takes money.