Book II begins with Aristotle's enquiry into the nature of ‘virtue' which he claims

is twofold, of thought and character. Virtue of thought, arises from the act of
teaching and that of character, from our habits. He further states that the virtues
of character do not come about in us naturally since what is natural cannot be
accustomed to be otherwise. Also, the virtues of character do not come about in
us in an unnatural way. But they come about in us because of our own receptive
nature towards them and are further completed through the means of habits.
Another argument, he further states, to support his above-mentioned statement is
regarding the things which arise in us naturally or are provided by nature. In this
case, we first receive the capacities after which we exhibit their respective
activities. Virtues, on the other hand, we acquire them by first engaging with the
activities. He explains this with the case of crafts, where we learn to build
buildings only by first engaging with the act of building and then we become
builders by building the buildings. Hence, we become just individuals by doing
just actions, temperate individuals by doing temperate ones and so on and so
forth. Aristotle further states that the difference of good and bad with respect to
virtues as well as crafts becomes conspicuous only after engaging in the
respective activities. For example, we come to know of the difference between a
good sportsman and a bad sportsman after she plays the game. This means that
we are not born with good or bad crafts (and virtues). The difference is created
because of our habits. If someone shows exemplary courage in certain
circumstance, it is because she is habituated to do so. The way we are habituated
plays a significant role and this is what brings about the required completion.
Next, Aristotle moves from his investigation about the nature of virtue to how we
become virtuous since that is his aim. In order to do so, he engages in the
investigation of the acts in accord with correct reason and their relation to various
virtues. Aristotle talks about certain states which are ruined when actions
committed in both excessive and deficient proportions. He gives the examples of
the strength and health of an athletic. Whereas deficiency in athletic regimen and
eating is sure to ruin her strength and health, excessive of the same will ruin them
too. Hence, he underlines the need to eat proportionately in order to be powerful
and healthy. The same is for virtues like temperance, courage, etc which are
preserved by the medial condition which otherwise would have been ruined by
excessive or deficient conditions.
Aristotle brings about the relation of pleasure and pain with virtues of character.
The relation is such that pleasure causes us to do base actions while pain causes
us to abstain from doing noble ones. Pleasure has become an intrinsic part of our
lives as we have grown with it. Also, we use pleasure and pain as a measure of
our actions. Therefore, Aristotle says that our whole work must be concerned with
these since they cause major differences in our actions.
There is a difference between the way things come about in crafts and in virtuous
actions. For things that come about by means of craft having their goodness
internal to themselves shall come about in a way for which a certain state is
enough. On the other hand, if things come about in accord with virtue, they are
required to be in certain state as well as the doer of the actions. There are also
certain factors which are concerned here which in case of crafts are not
considered. These are; if the doer of the action does them knowingly, if she
deliberately chooses them and she does so because of themselves and if she does
them from a stable and static state. Here, apart from knowing, all other factors are
of great importance. Just and temperate actions are then defined when a just and
temperate person would do them, whereas, if the same actions are done in the
same way by some other person, she wouldn’t be a just and temperate person.
Virtue is now thought to be of one of the three sorts, which occur in the soul;
feelings, capacities and states. It is not a feeling because excellence and base are
things which are not associated with feelings. Also, feelings are things outside of
our volition, but virtues and vices are more of deliberate choices. Virtues are not
capacities either. Now capacities are something by dint of which we are said to
be susceptible to the feelings. We are moved on account of our feelings but on
account of our virtues and vices, it is rather something different kind of
disposition. Hence, these are not capacities as well. So the only thing remaining
for them to be is states.
However, it is equally important to define what sort of state it is. So it is
something which completes the good state of that thing and also performs its
function well. For example, the virtue of an eye is to help see well and to perform
its task well. Similarly, a virtuous human being must be a good human being who
is able to perform its function well. Aristotle further talks about continuous and
divisible things of which we can take more, less and equal. Here, equal or mean
should be what we must aim for. However, he is not talking about the arithmetic
mean. This mean is different for different things and should be taken in relation
to us. We come back to our previous thought of things which are ruined because
of excessiveness and deficiency and where we are asked to take the medial
condition since it preserves what is good. Virtue is concerned with actions and
feelings where excess and deficiency is error and mean is said to be most correct
path. This medial condition is defined by reason. Virtue, then is the mean
condition between two vices excess and deficiency.