Merry Company on a Terrace is one of Steen’s largest works (141x131.4cm), which demonstrates his ability to create a complex composition on a big canvas, and sustain a sense of impact and vigor in every section of the painting. The composition of Merry Company on a Terrace is closely grouped, and Steen builds the ambience of the feast through the development of each of the characters. The occasion of the celebration is likely a domestic vine festival. The terrace roof is covered with grape vines, and in the right corner a young man climbed the ladder probably to pick some fruit. Correspondingly, most of the figures are preoccupied with the consumption of wine.

Steen portrays the joyful atmosphere of a festival gathering of three generations. This is a common theme in his art, that was also depicted in earlier paintings, such as The way you hear it (ca. 1663-1665) and Wealth is looking (1663). In Merry Company on a Terrace, the grandparents are in the center background drinking and playing with the baby, while the small child is in the forefront playing with the family dog. The artist inserts himself as the host of the gathering, he is the figure on the far left laughing and holding a jug. Steen often included himself in lively, festive scenes, in paintings like The way you hear it. In the role of the hostess is the blonde in the forefront. The artist likely modeled the figure after his second wife, Maria van Egmont. Because there are no portraits available of Maria, there is no way to decisively identify the hostess. The painting is dated after the death of his first wife, Margriet Goyen, in 1669, and it is known that Steen married Maria sometime in 1673. If the artist decided to remain true to his biography, the hostess in the painting is probably Maria. In this case, the small child is possibly the son he had with Maria, as his children with Margriet were already grown. There is also a suggestive element in the dynamic between the host and hostess, she casually holds a glass while he tilts the jug toward her.

In the background behind the host is Hans Wurst, a stage character of a fool. He is part of the Rederijkers, the Dutch guild of Rhetoricians, and his presence reinforces Steen’s connection to the theater. The scene also features musicians, the flutist with a tall hat, and the cittern player sitting in the forefront. The appearance of the cittern player is disheveled and romantic, with his long hair flowing down and untidy clothing. Finally, no celebration could be complete without the domestic pets: the small owl presiding over the merry group, and the brown and white dog that serves as a plaything to the little boy. The dog was possibly the artist’s pet, because the same kind of dog is featured in multiple paintings by Steen, such as Twelfth Night (1662), Wealth is looking, and Merry Family (1668). These additions are all elements that assist in creating feelings of warmth, humor and festiveness in this domestic ambiance.