Ned speaks with Ser Barristan Selmy, a knight of the Kingsguard who knew Ned's father. They ponder the fate of Ser Hugh, Jon Arryn's young squire who'd gotten knighted right after Jon's death. Ned then talks to King Robert, who has his young squire Lancel Lannister to help him put on his armor before he jousts. Ned chides Robert, saying that he's too fat to participate in the tournament. Robert eventually agrees, and he suggests that they go watch the rest of it.
The next pair of knights to clash is the Mountain, and Ser Loras Tyrell, the Knight of Flowers. Sansa is taken with Loras, more so since he offers her a beautiful red rose. Also watching the tournament is Renly Baratheon, Robert's younger brother. Littlefinger suggests he knows more about Renly and his relationship with Loras than what should be made public.
The Mountain loses to Loras, and Littlefinger suggests that it's because Loras's mare was in heat, which distracted the Mountain's stallion. After Loras takes the victory, the Mountain beheads his own horse and starts to attack Loras. The Hound, however, intervenes and saves Loras's life. Loras is in the Hound's debt.
Catelyn is still holding Tyrion prisoner, and they're traveling east to the Vale, the Arryn's realm, where Catelyn hopes to seek an audience with her sister Lysa, the widow of Jon Arryn. Tyrion warns that Lysa is more mad than what Catelyn remembers her as. Their group is attacked by a hill tribe, and by the end of the battle, most of Catelyn's guards are dead. During the fight, Tyrion saves Catelyn's life making his first kill in life.
Back at Winterfell, Bran is in the middle of studying the seven kingdoms though he's angry that his mother isn't around and no one will tell him where she has gone. Theon Greyjoy is practicing his archery, and later goes to the whorehouse to have a tousle with Ros. Ros inadvertently insults Theon by saying that he's not the only nobleman in her life, and this angers him. Ros, however, is able to calm him.
Ned speaks to Varys, who warns Ned that the King may fall to the same fate as Jon Arryn. He also suggests that Ser Hugh was the one who poisoned Jon with Tears of Lys, a type of poison that is colorless, odorless, and leaves no trace. The poison is exorbitantly expensive. Ned asks who could have paid Hugh to poison Jon. Varys says that it's someone who could afford it.
Arya is running around the castle corridors chasing after a cat, and she ends up down in the dungeons. She finds the corridor of dragon skulls Viserys referred to in an earlier episode. She hears voices so she hides, and listens to Varys and Magister Illyrio, who orchestrated the marriage between Daenerys and Khal Drogo, discussing the Hand knowing too much. They also seem to know who tried to kill Bran and say that war is coming. The wolf and the lion will be at each others throats.
Varys and Littlefinger then trade jabs in the throne room, indicating to each other, obliquely, that they have spies set upon each other. Then Littlefinger points that he knows Varys was speaking with the Magister. Renly then diffuses the tension by saying that King Robert has called a meeting of the council.
Arya is locked out of escaping the dungeons using the stairs so she heads for the outside, and ends up out of the castle walls. When she requests re-entry to King's Landing, the guards mistake her for a poor boy. She chides them, and later on Ned chides her about leaving the castle. She tells him what she's overheard. But their talk is cut short when Yoren, the Night's Watch's recruiter, arrives at King's Landing, asking to speak with Ned. In private, he tells Lord Stark that Catelyn has taken Tyrion prisoner for attempting to kill Bran.
King Robert tells his advisers that Daenerys is with child, which means that the Dothraki are in a very good position to mount an attack with a Targaryen commander from across the Narrow Sea, now that Drogo will soon have an heir. He believes the only recourse for this is to kill Daenerys and the baby she carries, but Ned is against it. He, however, is the only voice of contention in the group. The argument between Robert and Ned escalates until Ned resigns his post as the Hand. Ned is determined to leave quickly with his daughters before Robert decides to do anything rash to him.
Littlefinger catches up with Ned, saying that he should still continue on with the investigation that Jon started. Littlefinger promises that he can take Ned to the last person Jon spoke to before he fell ill.
Catelyn and Tyrion have made it to the Eyrie, the stronghold of the Vale and home to the Arryns. Catelyn's sister, Lysa, rules over the Vale as regent. She is shown breastfeeding her son, but he is clearly too old to be breastfed. Lysa is clearly mad, but Catelyn doesn't wish to admit it. Tyrion is sent to a cell and locked up. The cell is open to the outside, but thousands of feet up the mountainside. There's no true means of escape apart from death.
Renly and Loras have a quiet moment in Renly's rooms. Renly shares his frustration about not being taken seriously by anyone. Loras says that Renly could make a good king, if he had adequate funds and the ambition. The people love Renly and though he is fourth in line for the throne, that still means a viable chance.
Cersei and Robert discuss the Dothraki, and Cersei assures him that the horse people wouldn't be able to cross the Narrow Sea. Robert then confesses his love for Lyanna Stark, Ned's dead sister. He'd hoped that becoming king would ease the pain of losing her, but he was wrong. He sees nothing fulfilling about his position, only confinement.
Ned talks to a young whore in one of Littlefinger's pleasure houses. She has a baby with her, another one of King Robert's bastards. The woman says she is well off and the baby wants for nothing. She also just wants the baby's father to know that she still loves him.
Ned leaves the brothel and is confronted by Jaime with a score of Lannister soldiers. Jaime asks about Tyrion's whereabouts and Ned admits that he ordered Tyrion to be taken. Jaime acknowledges that he can't kill Ned or Tyrion would die in retribution, but he orders his men to kill Ned's men instead. A short fight ensues that leaves all of Ned's men dead including Jory Cassel, his captain of the guard, who's stabbed in the eye by Jaime. Left alone, Ned attacks Jaime and the two fight. One of Jaime's men pins Ned where he stands with a spear through his leg. Jaime hits his own man in anger for robbing him of a good fight, and then leaves Ned injured on the ground, demanding that he bring Tyrion back.