After her marriage to José Arcadio Buendía, Úrsula refuses to consummate their union for fear of conceiving a monster. She wears a chastity belt to prevent her husband from having intercourse with her. One day, however, José Arcadio Buendía defeats a poor loser in a cockfight. Prudencio Aguilar taunts the young Buendía about Úrsula's virginity, an insult that is aimed at José Arcadio's manhood. José Arcadio, in an impetuous rage, throws an ancient spear through Aguilar's throat and kills him. Úrsula later sees the dead man's ghost trying to plug the hole in his throat with "a plug of esparto grass."
Aguilar's ghost haunts the couple until they are forced to flee their ancestral village. Thus, the Buendías set out with some of their friends on a long journey through the jungle. Two exhausting years later, after camping in the wilds one night, José Arcadio Buendía has a dream about a city of houses with mirrored walls. He takes this dream as a divine sign, and he convinces his followers to build Macondo on the very site.
When José Arcadio Buendía, his wife Úrsula, and some twenty other adventurers settle there, the world is said to be so recent that many things do not have names and thus "it was necessary to point." José Arcadio organizes his small settlement into a model community. Yet there is already something strange about it. José Arcadio had planned the streets so as to shade all the homes from the tropical sun, but Macondo remains a burning place where the hinges and door knockers melt with the heat, "a peninsula surrounded by water where water was never known to be." When a heat wave occurs in Macondo, men and beasts go mad and birds attack houses; later, the town is afflicted by a plague of insomnia, and, even later, things have to be labeled. Eventually these labels have to be placed in the context of a thing's function. Occurring shortly after Rebeca's mysterious arrival, the insomnia plague not only causes the loss of memory but prevents sleep. The result is that the townspeople stay up nights amusing one another with nonsensical tales like the one about the capon:
an endless game in which the narrator asked if they wanted him to tell them the story about the capon, and when they answered yes, the narrator would say that he had not asked them to say yes, but whether they wanted him to tell them the story about the capon, and when they answered no, the narrator told them that he had not asked them to say no, but whether they wanted him to tell them the story about the capon, and when they remained silent the narrator told them that he had not asked them to remain silent but whether they wanted him to tell them the story about the capon . . . and so on and on in a vicious circle.
As the names and uses of things are being lost, José Arcadio builds a primitive computer dictionary. But Melquíades, the gypsy, returns to Macondo with a cure for the insomnia plague when José Arcadio has programmed fourteen thousand entries. The destruction of memory, like senility, signals the beginning of the transformation of consciousness; the insomnia plague is a metaphor for Macondo's prehistoric innocence, just as its cure is the mark of its cyclical return to history, to irreversible chronological and psychological time, and to a move out of a fantastic isolation.
This fabulous setting is the stage for the action of the novel as it relates to the Buendías. As in the Bible, the beginnings of things are in the words that bring them to the light of human consciousness. Hence, the narrative starts in the memory of how a child discovers for the first time something that is quite commonplace and yet which we know will be discovered by all children for all time to come. In this case, the child is not only the Colonel but his father as well, the patriarch José Arcadio Buendía, who has a childlike fascination with things that were commonplace to all other people except the Macondians.