Contains spoilers for this episode and earlier episodes.
Catelyn takes Tyrion towards the Eyrie rather than Winterfell. Mountain clans attack their party, and Tyrion fights beside his captors, saving Catelyn. Her sister Lysa is already convinced the Lannisters killed Jon Arryn and has Tyrion placed in a sky cell. In King's Landing, the tournament turns violent when Gregor Clegane loses to Loras Tyrell. Gregor kills his horse and attacks Loras, forcing the Hound to intervene against his own brother.
Varys tells Ned that Arryn was poisoned and suggests his former squire may have been responsible. Arya overhears Varys speaking with Illyrio beneath the Red Keep, but cannot identify the men when she warns her father. Robert orders Daenerys and her unborn child killed after learning of her pregnancy. Ned refuses to support the assassination and resigns. Littlefinger then offers to take him to another person connected with Arryn's investigation.
Ned visits a young mother and her baby, another of Robert's children. Outside the brothel, Jaime confronts him over Tyrion's capture. Ned takes responsibility for Catelyn's actions, and Jaime orders his men to attack Ned's guards. Jaime kills Jory Cassel before fighting Ned himself. A Lannister soldier drives a spear into Ned's leg from behind. Jaime strikes the interfering soldier, then leaves Ned alive with a demand that Tyrion be returned.