Act 5, scene 1 takes place in the palace of Theseus, Duke of Athens. He and his bride Hippolyta (the former Queen of the Amazons) remark on the strange stories the four Athenian youths (Lysander, Demetrius, Helena, and Hermia) have told them about the curious and enchanted romantic confusion they experienced in the woods.

Theseus says, "Lovers and madmen have such seething brains," and he dismisses the stories as nonsense, while Hippolyta says that it is remarkable how their stories all align. If they had really been dreaming, why would they have all had the same dream?

Lysander, Demetrius, Helena, and Hermia arrive as guests to the palace, and Duke Theseus welcomes them warmly. He calls upon Philostrate, master of revels (or in some manuscripts, Egeus, father of Hermia) to find some entertainment for the next few hours between supper and bedtime. Theseus is handed a scroll and reads out loud the descriptions of the typical fare: a song about a centaur battle, the riot of the tipsy Bacchanals, and the nine Muses mourning for the death of learning. When Theseus rejects all three choices for witty and humorous reasons, Philostrate reluctantly presents him with another option: a play about the the ill-fated lovers Pyramus and Thisbe, performed by "hard-handed men that work in Athens here / Which never labour'd in their minds til now."

Though warned against it, and despite Hippolyta's reservations, Theseus selects the play about Pyramus and Thisbe and says, "I will hear that play; For never anything can be amiss, / When simpleness and duty tender it."

The craftsmen enter and the play begins. Quince narrates a prologue to the old tale that is about to be dramatized. In a comical aside, Theseus says that "his speech was like a tangled chain, nothing impaired but all disordered." There are five characters in the play: the Wall, the Lion, Moonshine, Pyramus, and Thisbe. The roles are all played by the bumbling but endearing craftsmen, whom we've seen practicing devotedly in preparation for this moment.

The characters of Pyramus and Thisbe, secret lovers, speak to each other and kiss through a hole in the Wall (which is played by one of the actors). The dialogue takes on a mildly bawdy double entendre, and Hippolyta remarks in an aside, "This is the silliest stuff that ever I heard."

The lovers agree to meet at "Ninny's tomb," as the Lion and Moonshine enter. The Lion thinks his presence may cause fainting and comically explains to the ladies in the audience that he is really Snug the joiner, not a real lion. Moonshine says that his "lanthorn" represents the "horned" (crescent) moon, his thorn-bush represents a thorn-bush, and his dog represents a dog. The Lion pulls off Thisbe's mantle, and she runs away. When Pyramus arrives, he sees the mantle on the ground, assumes Thisbe has been killed, and stabs himself in an inadvertently comical manner. Thisbe returns and, seeing that her lover is dead, stabs herself and dies.

Bottom, who is playing the role of Pyramus, asks if the audience would like an epilogue or a "Bergomask dance between two of our company," and Theseus replies that no epilogue is necessary, since the ending is obvious. The dance ensues, and everyone goes off to bed.

Puck then enters, announcing that now that night has fallen, the fairies may come out. He has been sent to sweep and clean the palace before they arrive. Oberon and Titania enter, followed by their servants. They sing and dance, and Oberon blesses the three newlywed mortal couples, promising that their children will be healthy and that they will remain in love. All the fairies then exit, except Puck. Alone, Puck addresses the audience directly, saying that if the play has offended them, they should think of it as nothing more than a simple dream. He then bids the audience "good night" and asks them to offer up some applause if they are friends.