There are four major settings in the novel: East Egg (EE); West Egg (WE); the Valley of Ashes (VOA); New York City (NYC). Within each setting are two or more subsettings: East Egg – Daisy’s house; West Egg – Nick and Gatsby’s house; Valley – Wilson’s garage, the famous sign; Michaelis’ restaurant; NYC, Tom’s rented apartment, where people work; the Plaza Hotel. Each setting reflects and determines the values of the people who live or work there and also forms contrasts between settings. EE represents ‘old money’; the idle rich. WE represents vulgar ‘new money’; lack of ‘social credentials. The VOA, characterized by dust, is where the poor live and where the city’s ashes are dumped – a place of spiritual dryness (Dr. E’s eyes). The inhabitants are literally ‘dumped on’ by the rest of the world. NYC symbolizes what America had become in the 1920’s: a morally bankrupt place – a place inhabited by colorful and bizarre people, a place where the World Series could be fixed; lavish parties and affairs happened, and anything went. The idea of setting as moral geography is further reinforced by the overriding symbolism of the American East and the American Midwest which frames the novel as a whole.
The setting is important in this classic novel for several reasons. Tom, Daisy, Gatsby, and Nick are all out of place where they are. They have all been uprooted, all moved in search of some better destiny, or, in Gatsby's case, a whole new life. This indicates the rootlessness of American life, and the threat this mobility carries to character. They are specifically in the East, rather than the Midwest, and this is traditionally the older, more corrupt part of the story. At specific times, the setting is even more directly important: Gatsby's house is large and garish during parties, but touching, because he bought it so he could look across at Daisy's house.
The novel has two important settings, and what is most important about them is the vivid contrast between the two. Jay Gatsby's house is a fantasy playground, more of an "amusement park" for adults than a private home. It is a place of "many-colored, many-keyed commotion" for its visitors and is so renowned as a party spot that many guests come uninvited.
On the other hand, the "valley of ashes" that lies between West Egg and New York City is completely devoid of color and life. Everything in it is gray and lifeless. Myrtle, Tom Buchanan's mistress, lives here and also dies here. When Myrtle's husband travels between the valley of ashes to Gatsby's house, these two worlds collide, and Gatsby's mansion becomes a murder scene as well.