In Act 3, Scene 1, Romeo killed Tybalt in order to avenge Mercutio's death. In Act 3, Scene 2, the audience is aware that Juliet's husband is responsible for killing Juliet's cousin, but Juliet herself is not aware of this fact. This set-up is the basis for the dramatic irony in this scene. Dramatic irony occurs when the audience is aware of something that the characters are not aware of. When the nurse bursts in on Juliet's musings wringing her hands in worry, Juliet automatically assumes that something has happened to Romeo. The Nurse, being the comedic character that she is, makes matters worse by crying, "Ah, alas! he's dead, he's dead, he's dead! (line 39)," without specifying who is dead. This in turn makes Juliet even more worried, and she pushes the nurse to tell her more by asking if heaven can truly be so cruel as to take Romeo away from her. Once again, the nurse does nothing to ease Juliet's fears:
Though heaven cannot.
Who ever would have thought it?
Romeo! (lines 43-45)
At this point, Juliet is all but convinced that her husband is dead. However, she still has some doubt about her nurse's words and asks her to tell her straight out if Romeo is slain. Alas, the nurse is either too grief-stricken or Shakespeare was having too much fun playing with poor Juliet's emotions, because the nurse not only goes on to vaguely refer to someone's corpse but then makes things worse by throwing Tybalt's name into the mix, "O courteous Tybalt! honest gentleman/That ever I should live to see thee dead! (lines 65-66)"
After so many lines of misunderstanding between Juliet and her nurse, and some amusement or perhaps exasperation experienced by the audience, Juliet asks the nurse, "Is Romeo slaught'red, and is Tybalt dead (line 68)?" At last, the nurse sets the record straight and informs Juliet that Romeo is alive, but banished, and he is banished because he killed Tybalt. Unfortunately, Juliet finds little comfort in finally getting the nurse to straighten out the truth.