Iago and Rodrigo conspire against Othello because there is a rumor that Othello slept with Iago's wife and also because Rodrigo is in love with Othello's wife Desdemona.
At a post war party Iago decides to use Othello's second in command, and most trusted friend Cassio, to device Desdemona of being unfaithful in Othellos eyes. Iagos plans to do this by simply using Cassio's courtesy and politeness to make it seem like he is making moves on Desdemona and also setting up other "proof".
Iago and Rodrigo set up Cassio to get into a fight with Rodrigo which accidentally turns into a fight with Montano where Montano is severely wounded. They get the gentle spirited Cassio to fight by getting him drunk.
Othello hears of the brawl and comes immediately to figure how this event occurred, Iago explains to him in an a skewed version that they don't know how it started except that Cassio was drunk and aggressive. Othello becomes angry and demotes Cassio from second in command. Cassio is crushed by this news and feels like he lost his whole life.
Iago meets with Cassio after everyone left and tells him that there is a way to regain Othellos favor. Iago tells Cassio that if he wants to be in Othellos favor again he should convince Desdemona to convince Othello that Cassio is a good man. Iago only tells him this because he wants Cassio to spend time with Desdemona so that he can frame Cassio and Desdemona of having an affair.
Iago eludes to Cassio and Desdemona having an affair to the point that in Othello's mind there is no doubt that they aren't having an affair. Othello threatens Iago that if Iago is not correct in the affair he will be killed.