Chapter four opens with Nick attending another of Gatsby's parties. Nick uses this as a starting point and begins recounting some notes he claims to have taken, listing some of the more notable people he encountered that summer. His point is to prove that Gatsby's party attract the most notable people of the time. He also describes one man, Klipspringer, who never seems to leaves Gatsby's parties and has come to be known as the "boarder," which suggests he is living in the Gatsby's mansion.

One morning Gatsby goes to Nick's house and tells him they are having lunch together in New York. Nick agrees and the two drive into the city in Gatsby's car. During the drive, Gatsby gives Nick an overview of his background. Gatsby claims he was born into a wealthy Midwestern family who lived, oddly, in San Francisco (which is on the West coast and not in the Midwest). He says he was educated at Oxford, a very prestigious British college, and that after he toured Europe, he served in the military during WWI, where he was promoted quickly to a major. He claims to have dealt in jewels and to have had many adventures. Nick considers it almost laughable how far-fetched Gatsby's story is, but Gatsby produces a medal he was awarded for valor and picture of himself at Oxford, which, momentarily quells Nick's doubts.

When they get to the city they meet Gatsby's friend, Meyer Wolfshiem. Wolfshiem is an unsavory character whose cufflinks are real human teeth. Gatsby reveals that it is rumored that Wolfshiem "fixed" the 1919 World Series, meaning he paid players on one team to lose the game. Woflshiem is also linked to organize crime, which provides Nick with more information about the source of Gatsby's wealth. Gatsby also tells Nick that he has a favor to ask, but that Jordan will tell him about it.

Later, Nick sees Jordan, and she tells him the story of Daisy's and Gatsby. The two met when Gatsby, who was not wealthy then, was stationed near Daisy's home in Louisville, KY. They were very much in love, but Gatsby was called to New York to sail to Europe for the war. He vowed he would return when he was a wealthy man. The war ended, but Gatsby did not return. Tom Buchanan wooed Daisy, notably with a string of pearls worth thousands of dollars. On the day Daisy married Tom, she received a letter from Gatsby and almost called the whole thing off. Ultimately, she destroyed the letter, and married Tom, who was never faithful to her.

Gatsby, Nick discovers, bought his large house to be close to Daisy and threw his lavish parties hoping she'd attend. Seeing that she was not likely to attend, Gatsby asked Jordan to ask Nick to invite Daisy to tea and arrange a meeting. Nick agrees to do so.