Act I

Baltimore, 1948. The cast and crew members of Ford's Theater are preparing for the opening of their musical version of Shakespeare's The Taming of the Shrew (Another Op'nin', Another Show). Fred Graham - director, producer and lead actor - is giving last notes to the cast, among whom are his ex-wife, Lilli Vanessi and his new love interest, a young nightclub singer named Lois Lane. Lois's boyfriend – Bill Calhoun – is also in the show, but he is missing. Lois is very angry when she learns upon Bill's return that not only did he lose money gambling again, he has signed Fred's name on an IOU (Why Can't You Behave).

Fred and Lilli resume their constant bickering after Lilli finishes a telephone conversation with her fiancé, General Harrison Howell. Yet the two soon find themselves reminiscing about the first years of their marriage, when they were just starting out as actors (Wunderbar).

Two gangsters come looking for Fred, ready to collect the money they believe he owes them. When Fred denies having signed an IOU, they decide to sit in the audience while waiting for Fred to 'regain' his memory.

Fred sends a bouquet of flowers to Lois, but his dresser mistakenly delivers them to Lilli, who is very touched (So In Love). When Fred realizes that Lilli has not read the card that came with the flowers, he decides to pretend that he did indeed send the flowers to her, but his hope of making a clean break dissolves when Lilli places the unread card next to her heart right before she goes onstage.

As The Taming of the Shrew begins (We Open in Venice), we learn that Bianca - played by Lois - is not allowed to marry until her older sister Katharine - played by Lilli - finds a husband. This is by no means an easy task, since Katharine is a shrew whom no one wants to marry. Bianca, on the other hand, is courted by three men, among whom she is unable to choose (Tom, Dick or Harry). The problem of finding a husband for Katharine seems to be solved when Petruchio - played by Fred - arrives in town, announcing that he is looking for a rich wife (I've Come to Wive It Wealthily in Padua). Yet Katharine herself is hardly eager to marry (I Hate Men). After having received her father's blessing, Petruchio begins to woo Katharine (Were Thine That Special Face), but is unsuccessful.

Lilli as Katharine re-enters the stage, and it is clear that she has read the card. Taking advantage of the fact that Katharine is supposed to be nasty to Petruchio, Lilli kicks and slaps Fred whenever she gets the chance. Finally Fred decides he has had enough, and he spanks her.

Sore and humiliated, Lilli decides to leave the theater and marry General Howell right away. In an effort to stop her from doing so, Fred tells the gangsters he signed the IOU, but that he can only pay them if the show runs at least until the end of the week. The gangsters then force Lilli to continue with the show.

Back in The Taming of the Shrew, it is Katharine and Petruchio's wedding day (Cantiamo D'Amore). Katharine enters the stage accompanied by the gangsters, who are now in costume and pretending to be a part of the show. The first act ends with Petruchio's fruitless attempts to get Katharine to accept him as her husband (Kiss Me, Kate).

Act II

The second act begins in an alley behind the theater, where the cast is trying to cool off (Too Darn Hot). In The Taming of the Shrew, Petruchio takes Katharine to her new home, where, as part of his plan to tame her, he denies her food and sleep. While there he thinks back fondly on his bachelor days (Where Is The Life That Late I Led).

Backstage, General Howell comes to take Lilli away, but Fred manages to convince him that she is just being overdramatic. Bill is jealous when he catches Lois flirting with the General, but she insists that there is nothing for him to worry about (Always True to You (In My Fashion)). It seems that nothing Lois can do would ever make Bill love her less, as he proves by writing her a love song (Bianca). Fred makes some last efforts to persuade Lilli to stay, but she goes off with the General and leaves Fred pining for her (So In Love reprise).

Meanwhile, the gangsters discover that their boss has been 'eliminated,' which means that the IOU Bill has signed is no longer valid. Yet it seems that they are in no rush to leave the exciting world of the theater just yet (Brush Up Your Shakespeare).

Back in The Taming of the Shrew, it is Bianca and Lucentio's wedding (Pavane). When it is time for Katharine to go onstage, the cast, and Fred in particular, are surprised to see that Lilli has returned. Katharine too surprises the townspeople when she displays perfect wifely behavior. All rejoice (Kiss Me, Kate) (From This Moment On).