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In 1885, in the tiny European kingdom of Marshovia, playboy Count Danilo, the captain of the royal guard, admires the veiled rich widow Sonia during a military parade and later slips into her gardens to woo her. Obeying a Marshovian edict that stipulates that widows must always wear veils in public, the surprised Sonia covers her face before Danilo sees her and, in spite of his begging, refuses to lift it. Sonia then firmly rejects Danilo's deft flirtations but, over the next few days, is filled with confused thoughts about him. Unable to deal with her emotions, Sonia declares her one-year Marshovian widowhood over and moves to Paris. Because Sonia owns fifty-two percent of every cow in Marshovia and therefore controls the economy, her departure alarms the king, Achmed II, who frantically confers with his wife, Queen Dolores, about possible local suitors for the widow. After Dolores vetoes all of his suggested suitors, Achmed catches the queen entertaining Danilo in her bedroom. As punishment for his philandering, Achmed orders Danilo to go to Paris and marry Sonia. Before reporting to the Marshovian embassy for further instructions, Danilo decides to visit Maxim's, a favorite cabaret where all of the can-can dancers know and adore him. As Danilo leaves his rooms, Sonia, his neighbor, sees him and, abandoning her horde of insincere suitors, follows him to Maxim's. There Danilo runs into the bumbling Ambassador Popoff, who relates his "top secret" plan of ensnaring the coveted widow during the next night's embassy ball. When Sonia arrives at Maxim's, she is mistaken for a cabaret "girl" and is engaged by the unsuspecting Danilo. Irritated by Danilo's casual romantic attitudes, Sonia, who calls herself Fifi, flirts with various men in front of the count and laughs at his jealous indignation. In one of Maxim's private dining rooms, Sonia then drives Danilo to distraction by acting seductive and indifferent in turn. However, when Danilo confesses to her that he prefers cabaret girls because they never ask about "tomorrow," Sonia reveals that she is a "lady" and leaves in a wounded huff. Devastated by Sonia's exit, Danilo fails to show up at the embassy ball as expected and is found by Mishka, his orderly, in a drunken stupor at Maxim's. In his intoxicated state, Danilo reveals his diplomatic mission to the Maxim's women and is dragged to the ball under protest. After Popoff threatens to court-martial him if he refuses to woo the widow, the lovesick Danilo prepares to do his duty and meet Sonia. When Danilo discovers that Sonia and Fifi are one in the same, he is overjoyed but covers his feelings when she coolly rebuffs him. Eventually Danilo convinces Sonia of his sincere desire to give up his playboy ways and marry. Danilo's victory is short-lived, however, when Sonia overhears Popoff telling Danilo that, because the Marchovian newspapers are about to print a story exposing the marriage scheme, he must wed Sonia that night. Although Danilo refuses to participate further in the scheme and is put on trial for treason in Marchovia, Sonia continues to condemn him as a cold-blooded womanizer. Shortly before his execution is to take place, however, Sonia visits Danilo in jail, and while aware that Popoff is still conniving to bring them together, the couple finally gives in to love and embraces.