Countess Maritza, a beautiful young aristocrat with homes throughout the Balkan Lands, spent a good deal of time as a girl at this estate but has not visited it for a long time. A steward hired to manage this estate, Bela Törek, is none other than the recently impoverished Count Tassilo Endrödy-Wittenburg, forced to sell his possessions to pay his deceased father’s debts.

The gypsy girl Manja sings about the fickleness of fate while the old servant Tschekko predicts Countess Maritza will return one day. Several children present Tassilo with simple gifts, tokens of their parent’s appreciation for his kindness. Baron Karl-Stephan Liebenberg arrives to see the “steward.” Tassilo urges his friend to respect his incognito; Karl-Stephan reports that he has sold Tassilo’s possessions and paid his debts. Tassilo will continue this work until his sister, Lisa, who knows nothing of their poverty or his disguise, has a proper dowry. He confesses he sometimes misses his friends, and asks Karl-Stephan to say hello to romantic old Vienna.

Prince Moritz Dragomir Popolescu, a friend of the Countess, announces Maritza’s return to celebrate her recent engagement. She is greeted with a song, toasting her with “Tokay,” a lusty Hungarian wine. Maritza answers with a czardas describing her yearning to experience happiness in love.

Maritza thanks Popolescu for preparing the engagement celebration; unfortunately, her fiancé is unable to join them. Tassilo introduces himself as Bela Torek, the manager of her estate; she treats him condescendingly. He discovers that Maritza knows his sister Lisa and that she is a member of the entourage.

Lisa innocently seeks out Mr. Torek. Finding this “steward” is none other than her brother Tassilo, she assumes he is in love and is here to make a conquest. Tassilo explains his disguise as a bet with friends but can say no more; Lisa promises to keep his secret.

Maritza confesses to her friend Ilka that she is not engaged. When pressed by reporters, she told them she was going to marry Baron Koloman Zsupan, a character from the operetta The Gypsy Baron – which she happened to see that night at the Opera. She hoped this would discourage those merely after her money. Baron Koloman Zsupan is announced! He read of his “engagement” in the newspaper and rushed off to meet his betrothed – with whom he is immediately taken. Maritza suggests there is some mistake but Zsupan claims he is the last of his lineage and promises they will be king and queen of his estate in Varasdin.

While the engagement celebration begins inside, Tassilo remains alone on the terrace and sings of when he was a fine czardas cavalier. Maritza and her guests overhear and she asks him to sing it again. When he refuses, she dismisses him from her employment.

Zsupan and Popolescu propose that the entire party go to the tavern. As they prepare to leave, Manja predicts that within four weeks Maritza will fall in love with a handsome man of noble descent. Moved by these words, Maritza decides to remain, and her company departs without her. Tassilo enters to take his leave. Maritza revokes her dismissal and offers him her friendship.

Four weeks later.

Maritza and Tassilo have come to enjoy each other’s company. Several of her girlfriends have returned to the estate. They find Tassilo attractive and devise distractions to keep him from his duties. When Maritza suggests Tassilo escort the ladies to supper in the summerhouse, they are delighted.

Lisa has fallen in love with the dashing Baron Zsupan. When he arrives seeking Maritza, Lisa flies into a rage and bursts into tears. Unaware of her feelings for him, Zsupan berates the young man who is causing her such pain; if it weren’t for his engagement to Maritza, he would spend each and every night dreaming of her. Lisa hints at similar feelings for him.

Tassilo wishes to discuss business with Maritza, but has trouble concentrating when he sees her dressed so beautifully for the party. Maritza finds financial affairs boring and wants Tassilo to entertain her. They dance, encouraging each other to waltz their worries away. Zsupan rushes in to tell Maritza he cannot marry her; his grandfather’s will stipulates he must marry a poor girl or risk losing his fortune. Maritza is relieved. Popolescu arrives with the Cabaret troupe – if Maritza will not go to them, they will come to Maritza!

The scene is magically changed to a cabaret with Maritza’s friends at tables, waiters serving champagne, cabaret girls dancing and squealing with delight. Dancers entertain the guests and even Lisa contributes a song. Popolescu and Zsupan begin to feel the effects of the champagne and flirt with the cabaret girls. All have a great time!

Popolescu and her guests ask Maritza if, according to the prophecy of the gypsy girl, she has fallen in love. She tells them with affection that it is none of their business. Tassilo enters and is treated with scorn by Popolescu and some of the guests. Outraged at their behavior, he impulsively begins a letter to Baron Karl-­Stephan complaining of their rudeness.

Maritza asks why he has not joined them; he politely confesses that he is uneasy with her friends. Maritza understands and feels closer to him than ever. Asked what he would say if they were of the same social standing, he takes her into his arms and whispers, “I love you!” Maritza abandons herself to his embrace and they leave together.

Zsupan realizes he loves Lisa, not Maritza. Lisa, still angry, will not respond to this newly-declared love.

Popolescu hints to Maritza that Bela Törek may actually be an impoverished aristocrat in disguise; he tells her that he saw him kiss Lisa. Maritza discovers Tassilo’s unfinished letter and begins to read it. She misconstrues a sentence that Tassilo has written: “I will not rest until I have reached my goal – a dowry and a better future …” She is convinced Tassilo is writing about himself and is only after her money. Bitter and deceived, she treats Tassilo with contempt, angrily handing him a large sum of money which he hurls at the feet of her guests.

When Lisa attempts to stop Tassilo’s outburst, he calls her “Little Sister” and the two exit hand in hand. The guests are stunned: Lisa is Tassilo’s sister! Maritza can hardly believe her happiness for she now knows that Tassilo truly loves her.

The next morning.

Popolescu and Zsupan are sleeping in the summer-house, hung over from the party. Maritza enters dressed in a folk costume and tells them she must now run the estate since she has lost her steward. Tassilo comes to take his leave and asks for a letter of reference. She tries to entice him out of his reserve, but both are too proud to speak openly.

From out of nowhere appear Tassilo’s aunt, Princess Bozena Cuddenstein and her old servant, Penizek. She explains to Tassilo that a very wealthy Texan offered her a tremendous fortune for her land – it seems there were millions of barrels of oil on her property. When she learned of Tassilo’s misfortunes, she bought back all of his properties. All is well again! She informs him that she has arranged for his marriage to a wealthy noblewoman – Princess Ruzena Wittgenstein. Penizek produces a photograph of an extremely tall and very homely woman dressed in black. Tassilo explains that his heart belongs to another, and rushes off to tell Lisa the good news.

The Princess sends Penizek off to discover what he can about Countess Maritza from her servants. Entering in mid-discussion, Lisa explains to Zsupan that she is off to seek employment since she hasn’t got a penny. Zsupan is thrilled – he can propose a marriage to Lisa because she has no money, and the terms of his grandfather’s will shall be honored! Lisa accepts wholeheartedly.

The Princess learns that Tassilo and Maritza are in love but too proud and stubborn to resolve their differences. She arranges for Maritza to don a disguise and tells Tassilo that he must explain in person to Princess Ruzena that he is not available for marriage. Tassilo approaches the figure in black and apologizes for the unfortunate misunderstanding. The mysterious figure reveals herself to be Maritza and the lovers embrace. Lisa and Zsupan arrive announcing their engagement, and the whole company joins in the festivities.