Act I - The Pontevedrian Embassy in Paris, circa 1900, early evening

A diplomatic reception, hosted by Ambassador Baron Mirko Zeta and his wife Valencienne, is in progress to celebrate the birthday of the absent prince of their small and poor Balkan country. An urgent telegram announcing the financial collapse of Pontevedria is handed to Zeta by his personal secretary Njegus. This is overheard by the economic attache Kromov, the military attache Bogdanovitcsch, the cultural attache Pritchitsch and their wives Olga, Silvane and Praskowia. They all realize that a fast solution must be found so that they can remain in Paris living 'la dolce vita.'

Their plans are centred on the widow Anna Glawari, whose inheritance represents the only funs in the bank of Pontevedria. She is looking for a new husband and Zeta and his staff are aware that if she marries a foreigner they will lose any benefit from her thirty millions. All the men in the room are eagerly awaiting the wealthy widow with hopes of winning her hand. Two particularly dangerous candidates to their plans are the Spanish Vicomte Cascada and Monsieur Raul St. Croissant, who are both flirting with Silvane and Olga. Another feared foreign candidate is Camille de Rosilloff, who is passionately in love with Valencienne, who, though she is receptive to his attention, is determined to be a faithful wife and to marry him off to someone else.

Zeta's solution is "Operation Pontevedrian Groom." He has the perfect candidtate - his first secretary Count Danilo Danilovitch, an aristocratic adornment to the embassy, a bachelor and a man about town. Danilo, who is a permanent fixture of the famous night club, Chez Maxim, is summoned to the embassy by Njegus.

Anna arrives at the embassy to much fanfare and soon recognizes Danilo, her first great passion. Many years before they had been in love, but Danilo's uncle had dsapproved of an alliance with a poor farmer's daughter and had taken Danilo away. Anna then married the court banker, who died a few days later leaving her a very rich widow. Anna and Danilo soon become aware that the old chemistry between them is still there. However, because Anna accuses all men of wanting her money, Danilo cannot admit his true feelings for her. At Zeta's pleadings Danilo agrees to exert his influence on Anna to keep the foreign suitors away from her but refuses to marry her himself.

At an embassy ball, Anna is besieged by all the men who want to dance with her. She avoids them and chooses Danilo, who then proceeds to offer the privilege to any man who can pay him ten thousand francs. In this way the penniless suitors are avoided and Danilo dances with Anna.

Act II - Later that evening in the Embassy garden

Anna entertains the guests with a nostalgic song. Zeta tells Danilo that his work is not finished as Camille de Rosilloff is still a serious suitor and a danger to their plans. Njegus dismisses this as he claims that Camille is in love with a married woman. Zeta then commands Danilo to find out who this woman is. After interviewing the suspected wives, Dnailo has enough information to threaten St. Croissant and Cascada into leaving the premises, but before they do, all the men sing about life with and without women.

Anna accuses Danilo of interfering in her affairs, and tells him she is going to marry someone she met in Paris. Danilo is hurt and they argue. Anna discovers Valencienne's fan on which Camilla has written the words "I love you" and assumes that Danilo has written it and left it for her to find. She softens towards him and they make plans to see Paris together.

Although Valencienne is determined to be a faithful wife, Camille's passionate singing softens her resolve and she goes into the gazebo with him for a romantic tryst, where the two are observed by Njegus. Just then, Zeta enters the garden and Njegus frantically tries to divert him back into the house. Zeta proceeds to spy through the lattice-work, and much to his consternation, discovers his wife with Camille. He starts to tell this to Danilo, and at the same time Njegus arranges a switch of Anna for Valencienne.

Zeta is surprised to see Anna and Camille. Danilo is furious. Valencienne is saved, and Anna uses Camille to further provoke Danilo, announcing that she intends to marry de Rosilloff. All is lost, especially Anna's millions. Dnailo announces that he is going back to Maxim's, where the women are more predictable.

Act III - Maxim's nightclub, next evening

It is the following evening at Maxim's. The four wives arrive, followed by Njegus, who is determined to be, just for once, like Danilo, his hero. The six grisettes and the Madame who looks after their "affairs" do a wild can-can, observed by all the men, including Cascada and St. Croissant, who are now quarreling over the Madame de Grisettes. They are stopped by Danilo, who tells them that no woman is worth getting upset over.

Zeta and the attaches arrive and find Dnailo. Zeta tells him that Anna really loves him, and that he is being childish. Anna arrives, and Danilo forbids her to marry de Rosilloff, in the name of the Briderland. Anna, whose husband's will states that her new husband gets all her money, tells this to the crowd. All the financial problems are solved. Anna gets Danilo, Danilo gets the money, and the orchesta plays a waltz.