Miranda comes to see Ferdinand while he is carrying logs. Prospero is secretly watching and overhears Ferdinand and Miranda say they love each other. He finally approves of their love.
On their way to see Prospero, to kill him, Caliban and Stephano discuss horrible ways of murdering him. Ariel overhears them and makes them go in the wrong direction, with soothing, magical music.
In another part of the island, King Alonso and his companions sit down to rest. Prospero and Ariel cause the spirits of the island to prepare them a wonderful banquet. But at their first taste, Ariel appears to them. He accuses the "three men of sin" (Alonso, Antonio and Sebastian - plotters all) of their crimes. They are warned that they will suffer a nasty death unless they are truly sorry and live a "clear life" in the future. Only Alonso will admit what he has done.
A little way away, Prospero tells Ferdinand that he will no longer punish him, but instead will give him his daughter's hand in marriage.
Prospero makes a beautiful illusion of a party appear, to celebrate.
Prospero tells Ariel to lead most of the other survivors on the island to him. But remembering Caliban, Trinculo and Stephano's plot against him, Prospero tells Ariel to keep them away from him. Ariel leads them on a wild goose chase ending up in a smelly pool. They are soon attacked by spirits in the form of dogs.
Prospero is pleased with Ariel, and promises he'll soon be free.