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Timon dwells in a cave in the forest and decides that he will never go back to the society. His still continues to curse mankind. While digging for roots for his meal, he unearths a hoard of gold. He decides to make proper use of it. He suddenly hears the beats of drums and hides it.
Alcibiades enters along with his two mistresses, Phrynia and Timandra. Alcibiades at first does not recognize Timon. Later when he recognizes Timon, he is shocked to see Timonís state and confesses that he was unaware of Timonís misfortune. Timon, who is bitter about his experience with his Ďfriendsí gives Alcibiades the option that he too can betray him. Alcibiades is sympathetic towards his dear friend and offers him some gold. Timon refuses for he has lost interest in it.
Timon instructs the prostitutes to spread disease among men, to which Timandra gets angry, but Alcibiades understands Timonís state of mind. Timon is happy to hear that Alcibiades is marching against Athens. He gives back the gold Alcibiades offers him and also gives him some gold and tells him to not even spare the virgins the babes or the priest. Alcibiades gets fed up listening to Timon.
The mistresses beg Timon to give them gold. He heaps it on their apron and instructs them to continue with their profession. Alcibiades before leaving informs Timon that he would visit him again if he (Alcibiades) lived.
Apemantus is the next to enter the scene. He is upset to see Timon behaving in an affected way. Timon does not entertain him. In fact, Timon is quite rude to Apemantus. Apemantus comments on Timonís melancholy, which he feels Timon is overacting. It is a result of change of fortune. He advises Timon to become a flatterer and woo the Senatorís back. Timon commands him to leave. Apemantus inquires if Timon has anything for Athens to which Timon replies that he now has gold, which is more valuable than anything else for the materialistic citizens of Athens. Apemantus keeps irritating Timon and Timon finally he drives him away by throwing stones at him.
Flavius comes looking for Timon. He feels pity for his master and decides to serve him all his life. At first, Timon refuses to recognize the steward. But when the steward is ready to share his wealth, Timon is relieved to see a true human being and declares that Flavius is the only honest man in the world. Even then he asks Flavius whether there is a hidden motive behind his being kind to him. Flavius muses that if his master had this suspicious nature earlier, then he would have understood the true nature of his friends. Flavius wishes that his master would get rich and powerful once again. Timon gives him some of his gold and advises him to leave him alone and tells him to stay away from all mankind and never give any charity.