In this very important chapter, Nick once again interrupts the chronology of the story to give flashbacks about Gatsby's past. It is a very effective means of narration, for the reader can compare the present day Gatsby to a younger version and understand how the past and present fit together. The illusion surrounding Gatsby in the present is a direct result of the harsh reality of his past. His real history is very different that the made-up story of his history presented by Gatsby in Chapter 4. Gatsby's negation of the illusion surrounding his past foreshadows the negation of Gatsby's entire dream and, thus, the end of the man himself, who cannot exist in the real world without the dream.

The news reporter that knocks at Gatsby's door at the beginning sets the mood for the entire chapter. He is seeking a real story to print about Gatsby in the newspaper, and the reader is about to learn Gatsby's real history as a young boy. The important thing about Gatsby's youth is to understand that at age seventeen, he is already unable to cope with the reality of his world and has created dreams and illusions to make life tolerable for himself. When he spies Cody's yacht, he believes that he can change his fortune forever. He rows out to Cody, with dreams of fortune and fame. Not much has changed in Gatsby's essential being since that time. He is still characterized by the same naive sense of wonder about life that allows him to have unbelievable faith in fulfilling his dream. That blind faith is both a strength and weakness for him.

It is important to note how completely Gatsby has cut himself off from his history. He changes his name, disclaims his parents, and leaves his hometown in North Dakota forever. He makes himself into a man without roots, with no anchor of reality. As a result, it is easy for him to live in his dream world placated by wealth and illusion. Ironically, his dream has taken him from the West (the new frontier that typically offers opportunity) to the East (with its staid society that is filled with tradition and history).

Dan Cody, the man who makes Gatsby's dream grow, is a total contrast to Gatsby. He is the personification of the disgusting behavior of the newly rich. His life is characterized by drifting on his yacht, bouts of loud and heavy drinking, wantonly entertaining woman, and general moral degradation. His wealth means nothing, for he has no purpose in life. Gatsby, on the other hand, is driven by purpose, by his dreams of Daisy. As a result he roots himself across the bay from her, lives a quiet and sober (rarely taking a drink) personal life, and has no interest in any woman other than the one he dreams about. Despite their great differences, Gatsby explains in Chapter 4 that Dan Cody was his best friend (and probably the only friend).

Gatsby is also contrasted to Tom Buchanan in this chapter. Tom stops with his riding party at Gatsby's mansion to have a drink. Gatsby, although nervous around Tom, is polite and hospitable and tries to make the intruders feel comfortable. Tom, although ignorant of Daisy's affair with Gatsby at this point, is still extremely rude to his host. He believes this West Egger to be of a lower class, dismisses his presence as unimportant, and ignores his conversation. Tom is horrified that Gatsby plans to join them for dinner and perturbed that his wife seems to know this character.

Tom soon shows up at Gatsby's again -- this time for one of Gatsby's famous parties and with his wife Daisy. He is uncomfortable from the moment of his entry. His arrogant eyes survey the crowd and establish that he does not know a soul in the menagerie of party-goers. Tom is aloof and miserable amongst these West Eggers. He is successful, however, in finding a woman to pursue, but is still anxious to leave. When he finally persuades Daisy to depart, he openly laughs at Gatsby in front of Daisy, questioning the source of his wealth. Tom says he plans to find out who Gatsby really is and what he does, an ironic foreshadowing of the fact that soon Tom discovers that what Gatsby does is to have an affair with his wife Daisy.

Another contrast in this chapter is the difference in this party and the first one that Nick attended at Gatsby's. Unlike the sense of overall gaiety at the first gathering, there is a quality of oppressiveness, an air of unpleasantness and harshness, about this one. Nick attributes the difference to Tom's brooding presence and also to the fact that Daisy is observing and judging the gathering. Gatsby is aware of her reactions to the party and moans to Nick that she did not like it at all. In truth, the difference now is that Gatsby's dream is beginning to shatter. The real Daisy does not fit properly into Gatsby's world or the society of West Egg. He was really much happier when Daisy was the perfect dream across the bay. As long as Gatsby dreamed about her, he had perfect (although deluded) vision and pure purpose. Now the dream is being destroyed by the reality.

The chapter is also filled with ironies. Tom chases another woman at the party, and yet is upset that Daisy runs around by herself too much and has become acquainted with Gatsby in the process. He also harshly criticizes the guests and behavior at Gatsby's party, neither of which is as bizarre as the guests and behavior at the previous party at Myrtle's apartment. Daisy, who seems no longer concerned about Tom's infidelity and who offers him a pencil to write down the addresses of the women that he meets at the party, is worried about Gatsby finding an authentically radiant young girl, as if Daisy recognizes that she herself is not authentic. Gatsby senses that Daisy does not like the party, but the parties and the whole illusion of his life has been created for Daisy. The final irony is Gatsby's belief that he can recapture the past, that he can fix everything with Daisy through his wealth. As he talks, however, he paces amid the discarded fruit rinds and crushed flowers from the party, proof that the past is history and cannot be changed, just like the crushed flowers cannot be brought back to life. The party is over, and only the residue is left behind; Gatsby's dream is soon to be over as well, leaving only a similar residue.

At the end of the chapter, Nick gives another flashback into Gatsby's past. It is a description of the first time Gatsby kissed Daisy, which is synonymous with the tangible beginning of his dream world. For five years Gatsby's dream has expanded, but remained pure and spiritual, tied to an illusion of what Daisy is. Now the dream is disintegrating into flesh and blood, and Gatsby, without the dream, really has nothing. As Nick reflects on the sad state of affairs for his neighbor, he also thinks about the sad state of affairs of Americans in the 1920's, who have lost the dream but continue the party.