ACT 1.
Baron Zeta may be throwing a lavish party in his Paris embassy to celebrate the birthday of the ruler of his Fatherland Pontevedro, but he does have major worries. Pontevedro’s Court Banker has died, leaving his beautiful widow Hanna immensely rich. If she were to remarry, her fortune would go to her new husband, and if he were not from Pontevedro, that struggling little state in the Balkans, would plummet into bankruptcy. For Zeta there is only one solution to his problem: his idle and philandering First Secretary Count Danilo must sacrifice himself for the Fatherland and marry Hanna. While Danilo is being tracked down in the fleshpots of Paris, Hanna is being mobbed by fortune-hunting suitors, including Cascada and St Brioche, whom she is able to hold at arm’s length. Danilo is finally prised away from the flirtatious grisettes at Maxim’s but is unwilling to agree to Zeta’s proposition. He is admittedly in love with Hanna and would have married her, but for the objections to her lowly status from his snobbish aristocratic family. Now he is worried that she will think he is only attracted by her money, so he refuses to propose to her. He does however promise Zeta that he will see off any non-Pontevedrian admirers who may be pressing their suit on Hanna. Meanwhile, Zeta’s young wife Valencienne is in a quandary of her own. She is besieged by handsome young Camille, whose advances she is increasingly unable to resist. He has written “I love you” on her fan, which she carelessly mislays and which finds its way into Zeta’s hands. Fortunately, he is too witless to suspect her of infidelity and naively assumes the fan belongs to the notoriously flirtatious Olga. Danilo drives Hanna’s suitors away with a little coup: he arranges a “Ladies’ Choice” dance number, and when Hanna chooses him for a partner, he offers to sell the dance for ten thousand francs and donate the money to charity. No one takes him up on his offer and he insists on the disgruntled Hanna dancing with him alone in the empty ballroom.

ACT 2.
Hanna now throws her own Pontevedrian party in her Paris mansion, and launches it with a rendition of a favourite Pontevedrian folk-song. Her love for Danilo is now rekindled, but he is still playing hard to get and concentrating on finding out on Zeta’s behalf the true owner of the incriminating fan. His carelessness with it enables Valencienne to reclaim it. She is now desperate to remain a highly respectable wife and urges Camille to propose to Hanna. However, she does give in to Camille’s request for a farewell kiss in a summer-house. Luckily they are spotted by Zeta’s watchful secretary Njegus, who manages to spirit Valencienne away and substitute Hanna for her in the summer-house. Zeta is once more prevented from finding out about his wife’s dalliance with Camille, but Danilo cannot control his jealousy on seeing Hanna and Camille together and storms off back to Maxim’s.

ACT 3.
Hanna has prepared one more surprise for Danilo: she has recreated Maxim’s in her own garden and Njegus has filled it with grisettes - including a guest grisette in the person of Valencienne, who can let her hair down for a moment. Hanna explains to Danilo what really went on in the summer-house and he finally melts and admits that he loves her. Zeta has now at last twigged that Valencienne was guilty of an indiscretion, so he announces he will divorce her and marry Hanna himself. He loses his enthusiasm for this scheme when Hanna explains that she will lose her fortune if she remarries but Danilo is delighted: he can now marry her without being accused of having designs on her money. Hanna then strategically adds that she will lose her fortune because it will go to her new husband, so Zeta is reassured that it will stay in Pontevedro as he had hoped. He is also reassured when Valencienne’s fan resurfaces, because it now contains a second inscription in her handwriting: “I’m a highly respectable woman”.