The cellar resembles a cave, with only one small window to illuminate its dank recesses. In a corner, thin boards partition off the room of Vaska, the young thief. In the kitchen live Kvashnya (Dough), a vendor of meat pies, the decrepit Baron, and the streetwalker Nastya. All around the room are bunks occupied by other lodgers.

Nastya, her head bent down, is absorbed in reading a novel titled Fatal Love. The Baron, who lives largely on Nastya's earnings, seizes the book and reads its title aloud. Then he bangs Nastya over the head with it and calls her a lovesick fool. Satine raises himself painfully from his bunk at the noise. His memory is vague, but he knows he took a beating the night before, and the others tell him he had been caught cheating at cards. The Actor stirs in his bed on top of the stove. He predicts that some day Satine will be beaten to death...