This chapter describes Nebuchadnezzar's dream of a great statue. Daniel interprets it as representing a timeline of four empires that will ultimately be replaced by God's eternal kingdom. Scholars differ over the identity of the fourth empire.
In this chapter, Daniel interprets King Nebuchadnezzar's dream of a great statue that represents a timeline of four empires.

Verses 1 to 28 are narrative that set the scene.

Daniel describes the dream in verses 29 to 36. He then interprets it for the king in verses 37 to 45. In the dream, Nebuchadnezzar saw a great statue representing a timeline of four empires, numbered as follows:
1) The head of gold represents Nebuchadnezzar and his Babylonian empire (v38).
2) The chest and arms of silver represent another kingdom that would arise, which Daniel said would be inferior (v39a). Chronologically, this was the Persian Empire of Cyrus, who conquered Babylon in 539 BC. The Persian Empire was significantly larger than the Babylonian one, so Daniel's description of it being inferior may have simply been political flattery.
3) The belly and thighs of bronze represent the Greek Empire of Alexander the Great, who conquered the Persian empire in 333 BC.

The identity of the first empire is clearly specified as Babylon in verse 38. Interpreting Daniel 2 in combination with chapters 7 and 8, the identities of the second and third empires become clear. The Medo-Persian and Greek Empires are named in 8:20-21. In each case, the succeeding empire conquered the previous one and fully absorbed it, becoming even larger each time, and in each case these empires ruled both Babylon and Israel. The fact that the dream was revealed to Nebuchadnezzar and interpreted by Daniel implies a relevance to both Babylon and Israel.

4) The legs of iron (v40) represent a fourth empire, but its identity is less clear. What is clear is that the feet of iron mixed with clay represent the state of this same fourth empire at the second coming of Jesus (represented by the rock) when he establishes his earthly kingdom (represented by the mountain which fills the whole earth). So the timeline of Daniel 2 spans history from about 600 BC all the way up until the second coming of Jesus. This indicates there must be gaps in the timeline, given that several empires have ruled Babylon and Israel in the time between the Greek Empire and today. So which empire is the fourth empire?

After Alexander's death, the Greek Empire was divided between his four generals. Seleucus succeeded him as ruler of the eastern part. This became known as the Seleucid Empire and was the part that ruled over both Babylon and Israel. It was still a continuation of the Greek Empire. The eastern part of the Seleucid Empire was gradually taken over by the Parthian Empire which arose in 247 BC. The Parthians eventually killed the last Seleucid king in 129 BC. From that point, Babylon was under Parthian Rule until 224 AD, while Israel enjoyed a period of independence as the Hasmonean kingdom from about 140 to 37 BC. In 37 BC, the Romans imposed their rule over Israel, placing Herod the Great as king over them. Herod was an Idumean (Edomite). From a western or Jewish perspective, it has generally been assumed that the fourth empire is Roman. But from a Babylonian perspective it would be Parthian. So there is a mismatch. And neither the Roman Empire, nor the Parthian Empire conquered all the territory of the previous three empires. In 116 AD, Emperor Trajan launched a campaign against the Parthians, marched through Babylonia and made it as far as the Persian Gulf. But he never completely conquered the Parthians, and they drove him back out again the following year.

After the Greek (Seleucid) Empire, the next empire to rule both Israel and Babylon was the Islamic Empire, which arose in the 7th century AD. I believe the Islamic Empire is the fourth empire. The Islamic Empire did conquer nearly all the territory of the former empires. Also the description of the feet as 'mixed' may be a significant clue. This is the Aramaic word 'arab' which survives even today and is used to describe the mixed tribes of Arabia, known as the Arabs.

The two legs suggest a duality to the fourth empire. Those who identify it as Rome see this duality in the western part that was Latin speaking, and the eastern part that was Greek speaking. The Roman empire formally split into East and West in 395 AD. If the fourth empire is Islamic, that duality may be understood in the divide between Sunni and Shia.

If the statue is a timeline, the feet represent the final state of the fourth empire as it exists at the second coming of Jesus. Initially the fourth empire is strong, as represented by the iron legs. But in its end-time state, it is weak and brittle, as represented by the feet of iron mixed with clay.

In the dream, a stone is cut out but not by human hands (v34). It strikes the statue at the feet, and the whole statue, including the iron, clay, bronze, silver and gold, is broken to pieces 'without distinction'. 'Without distinction' is translated 'together' in the KJV, and as 'at the same time' in the NASB. They become like chaff that is blown away by the wind from a summer threshing floor, leaving no trace (v35). The stone that struck the statue then becomes a mountain that fills the whole earth. The stone represents God's coming Messiah and the mountain is his eternal kingdom that fills the earth and replaces all previous earthly kingdoms.

Because the first century Jews interpreted the fourth empire to be Rome, they expected that if Jesus were the Messiah, he would destroy the Roman empire, like the stone in this dream, and then establish his eternal earthly kingdom.

Whether the fourth empire was Rome, or the Islamic Empire, both have been and gone. The Western Roman Empire fell in 476 AD and the Eastern Roman Empire (also known as the Byzantine Empire) fell in 1453 AD. The Islamic Empire went through several phases, ending up as the Ottoman Empire, which fell during World War I.

The dream gives no indication of a gap in the timeline between the legs and the feet, except that the feet represent the state of the fourth empire in the end times when Jesus comes back. Daniel 7 describes a second dream about these same four empires, but represented as four beasts. Daniel 8 gives further revelation about the second and third empires. And in Revelation, John sees a seven-headed beast, whose heads represent seven empires. Several passages in Revelation indicate that the fourth empire of Daniel 2 and 7 will be restored in the end times as the empire of the Antichrist. So we should either anticipate a revived Roman Empire, or a revived Islamic Empire, that will be overthrown by Jesus at his second coming.

For further analysis of these two dreams of Daniel 2 and Daniel 7, please view my Timeline of Four Empires page.
Places: Babylonian Empire, Persian Empire, Greek Empire, Seleucid Empire, Roman Empire, Byzantine Empire, Islamic Empire, Ottoman Empire
Symbols: Statue, Stone as Jesus, Mountain as kingdom of Jesus
Tags: Timeline of four empires, Babylonian Empire, Persian Empire, Greek Empire, Roman Empire, Islamic Empire, Restored fourth empire, Jesus establishes his kingdom
Nebuchadnezzar Has a Disturbing Dream
2 In the second year of his reign Nebuchadnezzar had many dreams. His mind was disturbed and he suffered from insomnia.
2 The king issued an order to summon the magicians, astrologers, sorcerers, and wise men in order to explain his dreams to him. So they came and awaited the king’s instructions.
3 The king told them, “I have had a dream, and I am anxious to understand the dream.”
4 The wise men replied to the king: [What follows is in Aramaic ] “O king, live forever! Tell your servants the dream, and we will disclose its interpretation.”
5 The king replied to the wise men, “My decision is firm. If you do not inform me of both the dream and its interpretation, you will be dismembered and your homes reduced to rubble!
6 But if you can disclose the dream and its interpretation, you will receive from me gifts, a reward, and considerable honor. So disclose to me the dream and its interpretation!”
7 They again replied, “Let the king inform us of the dream; then we will disclose its interpretation.”
8 The king replied, “I know for sure that you are attempting to gain time, because you see that my decision is firm.
9 If you don’t inform me of the dream, there is only one thing that is going to happen to you. For you have agreed among yourselves to report to me something false and deceitful until such time as things might change. So tell me the dream, and I will have confidence that you can disclose its interpretation.”
10 The wise men replied to the king, “There is no man on earth who is able to disclose the king’s secret, for no king, regardless of his position and power, has ever requested such a thing from any magician, astrologer, or wise man.
11 What the king is asking is too difficult, and no one exists who can disclose it to the king, except for the gods – but they don’t live among mortals!”
12 Because of this the king got furiously angry and gave orders to destroy all the wise men of Babylon.
13 So a decree went out, and the wise men were about to be executed. They also sought Daniel and his friends so that they could be executed.
14 Then Daniel spoke with prudent counsel to Arioch, who was in charge of the king’s executioners and who had gone out to execute the wise men of Babylon.
15 He inquired of Arioch the king’s deputy, “Why is the decree from the king so urgent?” Then Arioch informed Daniel about the matter.
16 So Daniel went in and requested the king to grant him time, that he might disclose the interpretation to the king.
17 Then Daniel went to his home and informed his friends Hananiah, Mishael, and Azariah of the matter.
18 He asked them to pray for mercy from the God of heaven concerning this mystery so that he and his friends would not be destroyed along with the rest of the wise men of Babylon.
19 Then in a night vision the mystery was revealed to Daniel. So Daniel praised the God of heaven,
20 saying, “Let the name of God be praised forever and ever, for wisdom and power belong to him.
21 He changes times and seasons, deposing some kings and establishing others. He gives wisdom to the wise; he imparts knowledge to those with understanding;
22 he reveals deep and hidden things. He knows what is in the darkness, and light resides with him.
23 O God of my fathers, I acknowledge and glorify you, for you have bestowed wisdom and power on me. Now you have enabled me to understand what I requested from you. For you have enabled me to understand the king’s dilemma.”
24 Then Daniel went in to see Arioch (whom the king had appointed to destroy the wise men of Babylon). He came and said to him, “Don’t destroy the wise men of Babylon! Escort me to the king, and I will disclose the interpretation to him!”
25 So Arioch quickly ushered Daniel into the king’s presence, saying to him, “I have found a man from the captives of Judah who can make known the interpretation to the king.”
26 The king then asked Daniel (whose name was also Belteshazzar), “Are you able to make known to me the dream that I saw, as well as its interpretation?”
27 Daniel replied to the king, “The mystery that the king is asking about is such that no wise men, astrologers, magicians, or diviners can possibly disclose it to the king.
28 However, there is a God in heaven who reveals mysteries, and he has made known to King Nebuchadnezzar what will happen in the times to come. The dream and the visions you had while lying on your bed are as follows.

29 “As for you, O king, while you were in your bed your thoughts turned to future things. The revealer of mysteries has made known to you what will take place.
30 As for me, this mystery was revealed to me not because I possess more wisdom than any other living person, but so that the king may understand the interpretation and comprehend the thoughts of your mind.
31 “You, O king, were watching as a great statue – one of impressive size and extraordinary brightness – was standing before you. Its appearance caused alarm.
32 As for that statue, its head was of fine gold, its chest and arms were of silver, its belly and thighs were of bronze.
33 Its legs were of iron; its feet were partly of iron and partly of clay.
34 You were watching as a stone was cut out, but not by human hands. It struck the statue on its iron and clay feet, breaking them in pieces.
35 Then the iron, clay, bronze, silver, and gold were broken in pieces without distinction and became like chaff from the summer threshing floors that the wind carries away. Not a trace of them could be found. But the stone that struck the statue became a large mountain that filled the entire earth.
36 This was the dream. Now we will set forth before the king its interpretation.

Daniel Interprets Nebuchadnezzar’s Dream

37 “You, O king, are the king of kings. The God of heaven has granted you sovereignty, power, strength, and honor.
38 Wherever human beings, wild animals, and birds of the sky live – he has given them into your power. He has given you authority over them all. You are the head of gold.
39 Now after you another kingdom will arise, one inferior to yours. Then a third kingdom, one of bronze, will rule in all the earth.
40 Then there will be a fourth kingdom, one strong like iron. Just like iron breaks in pieces and shatters everything, and as iron breaks in pieces all of these metals, so it will break in pieces and crush the others.
41 In that you were seeing feet and toes partly of wet clay and partly of iron, so this will be a divided kingdom. Some of the strength of iron will be in it, for you saw iron mixed with wet clay.
42 In that the toes of the feet were partly of iron and partly of clay, the latter stages of this kingdom will be partly strong and partly fragile.
43 And in that you saw iron mixed with wet clay, so people will be mixed with one another without adhering to one another, just as iron does not mix with clay.
44 In the days of those kings the God of heaven will raise up an everlasting kingdom that will not be destroyed and a kingdom that will not be left to another people. It will break in pieces and bring about the demise of all these kingdoms. But it will stand forever.
45 You saw that a stone was cut from a mountain, but not by human hands; it smashed the iron, bronze, clay, silver, and gold into pieces. The great God has made known to the king what will occur in the future. The dream is certain, and its interpretation is reliable.”
46 Then King Nebuchadnezzar bowed down with his face to the ground and paid homage to Daniel. He gave orders to offer sacrifice and incense to him.
47 The king replied to Daniel, “Certainly your God is a God of gods and Lord of kings and revealer of mysteries, for you were able to reveal this mystery!”
48 Then the king elevated Daniel to high position and bestowed on him many marvelous gifts. He granted him authority over the entire province of Babylon and made him the main prefect over all the wise men of Babylon.
49 And at Daniel’s request, the king appointed Shadrach, Meshach, and Abednego over the administration of the province of Babylon. Daniel himself served in the king’s court.