Jesus' conversation with Nicodemus moves in two parts after the brief introduction in verses 1-2. The first part is in vv. 3-8 where the keyword is "to be born." The second part is in vv. 9-21 which can be further subdivided into vv. 9-12 ("speak", "witness", "proclaim"), vv. 13-15 ("heaven", "raise up"), vv. 16-21 ("eternal life", "judgment/condemnation", "light", "darkness"). This second part is in turn tied up together by the verb "to believe."
"Unless a man be born anoyen..." (vv. 3-8)
The Greek adverb anothen can either mean "again" or "from above". The conversation here develops in a manner of a lesson: a teaching is presented and a question is asked for clarification. The ambiguity of anothen is the occassion for the question in v. 4 as Nicodemus misunderstands the statement "to be born anothen" as "to be born again." "How can a man grown old enter his mother's womb and be born a second time?"
In the gospel of John, there are two realms: the realm "above" and the realm "below". "Above" is the realm of God and "light." "Below" is the realm of "the world" and "darkness". "To be born from above" is to be "of God." When Jesus responds to Nicodemus' question, he no longer repeats the expression "from above", instead he introduces the phrase "be born in water and spirit." Here, Jesus seems to leave the theme of water and concludes the section with the expression "born of the Spirit." In the Gospel of John, the theme of "water" will be taken up in chapter 4, in the episode with the Samaritan woman.
He who is born of the Spirit, like the wind will no longer be confined to a location. With the statement in v. 8, Jesus concludes his first lesson to Nicodemus: those who are entering the kingdom of God will not do so by birth right or by place of origin. Nicodemus and the people he represented believed that their being sons of Israel (genetics place of origin) makes them "of God." Jesus invalidates this claim by saying that what matters now is to be born from above and born in Spirit.
"We proclaim what we know..." (vv. 9-21)
The theme of the conversation shifts here. Nicodemus' question in verse 9 is answered by a speech about the role of the "one who comes down from heaven", i.e. "from above" (v. 13) and concludes with a teaching on eternal life (vv. 14-18) and condemnation (vv. 19-21)
The key to life and condemnation is one's attitude towards the "one who comes down from heaven" (v.13) because he is given (v. 16) and sent (v. 17) by God. Nicodemus had earlier identified Jesus as "one from God" (v. 2). Jesus identifies himself as the "son of man" who comes down from heaven (v.13) which in turn is progressively identified as "only begotten" (v.16) "the son" (v. 17) and "the only begotten son of God" (v.18). Jesus declares that men's attitude towards him -- whether believing or not believing -- will be their ticket to eternal live or condemnation NOW.
In verses 11-12, something strange seems to happen. Instead of the expected "I", a "We" actually introduces the whole discourse from vv. 13 onwards. What does the "We" mean? Is it a majestic plural? Or is it the Church speaking in union with Christ? Nicodemus had asked how rebirth from above can occur, presumably, for every man who wants it. The introduction to the response beginning v. 13 is couched in a formula that will be encountered again in 1 John 1:1-3: "what we know ... we proclaim; what we have seen ... we give witness to". Those who will believe in him who will be raised (v. 14) in accepting the gift of God's love (v. 16) will also have to proclaim and witness to this faith with the "We" that now speaks.
In verses 19-21, it is declared that men's attitude towards the light will be their condemnation to darkness and by implication, to death. In the prologue to the gospel, it was already stated that this light was the life (John 1:3-4). It is the light that shines on every man that is born (1:9), the Word that was made flesh, and had the glory of the only begotten son of God (1:14). Those rejecting this light are revealed for what they are: lovers of darkness, agents of evil (vv. 19-20). Those however who accepts the light are those who do the truth and are by implication, of God (v. 21, cf. John 1:12).