Background
In Pontevedro, Hanna, a young woman from a humble background, and the young Count Danilo fall passionately in love. Marriage, however, is out of the question due to their difference in status. The two lose touch...

Act I
A quarter of a century later in Paris. A celebration is taking place at the Pontevedrian embassy. The host, Mirko Zeta, is worried that his state will go bankrupt. He wants to tie the widowed millionaire Hanna Glawari – just arrived in Paris – to her fatherland through marriage. To ensure that her millions are not lost to a Parisian, he sends his lively secretary Danilo after her, summoning him from his favourite restaurant, „Maxim’s“. Zeta fails to realise that his own wife Valencienne is having an affair with a Parisian, Camille de Rosillon.
Millionaire heiress Hanna Glawari arrives, and is ardently wooed.
Danilo arrives, bleary-eyed. When he and his former lover Hanna meet, their old love is rekindled. Troubled by Hanna’s million-dollar inheritance, Danilo vows never to tell her „I love you!“ Hanna takes this as a declaration of erotic war...
Danilo vehemently rejects Zeta’s order to marry Hanna Glawari. However, he does promise to keep the Parisian men away from Hanna and her millions, which he promptly succeeds in doing: as Hanna is being wooed provocatively at a lavish ball, he drives the men away by offering them the dance Hanna has granted him – at an exorbitant price. Left alone, Hanna and Danilo can no longer suppress their feelings, and they dance together.

Act II
Hanna Glawari invites guests to a lavish party, where the customs of the Pontevedrian homeland are to be celebrated.
Zeta receives a tip-off that Camille de Rosillon is secretly in love with a lady. He wants to find out who she is...
Hanna tries to force a declaration of love from Danilo, who is sticking to his resolution not to fall for her. When she fails in this, she arouses his jealousy by pretending to want to marry someone else. Meanwhile, in a pavilion, Camille de Rosillon manages to seduce Valencienne, who is actually trying to give up her risky affair with him. Zeta’s servant Njegus sees the pair disappear together.
Zeta wants to discuss the impending state bankruptcy in the same pavilion, but Njegus prevents him from catching his wife and Camille in the nick of time: he swaps Valencienne for Hanna via the back door.
Hanna and Camille step out of the pavilion in front of the assembled company, and announce their engagement. There is great confusion, especially for Danilo; furious with jealousy, he wants to go off to „Maxim’s“.

Act III
Hanna, who has already planned for this eventuality, surprises Danilo with his sweethearts from Maxim’s, the „grisettes“, whom she has invited to her party.
If Hanna really does marry Camille, Pontevedro faces certain bankruptcy. Danilo therefore goes to talk to Hanna on Zeta’s behalf, and learns that she was only helping Valencienne out of an embarrassing situation in the pavilion. Zeta now surmises what happened in the pavilion. He wants to divorce Valencienne and marry Hanna himself. Hanna tells Zeta that she stands to lose all her money if she remarries, upon which Danilo finally breaks his silence and tells Hanna „I love you!“ Hanna goes on to say that her money will then pass to her husband.