Act I
Sylva Varescu, a successful cabaret performer from Budapest, is about to embark on a tour of America. Three of her aristocratic followers, Edwin, Feri and Boni, would prefer her to stay. Edwin, unaware that his parents have already arranged a marriage for him back home in Vienna, orders a notary to prepare a promissory note of his expected marriage to Sylva within ten weeks. Sylva leaves on her American tour and Edwin leaves for peacetime military duty.
Act II
Just as the promissory note is about to expire, Sylva visits Edwin’s Palace in Vienna, pretending to have married Boni as her entree into his family’s society. Edwin is about to be engaged to Stasi, who does not care for him and wishes only an arranged marriage. Boni falls in love with Stasi and Edwin regrets not keeping his promise to Sylva sooner. However, Edwin makes the faux pas of informing Sylva that his parents would accept Sylva only if she pretends to have been divorced from Boni and therefore already entered society via an earlier marriage. Edwin’s father separately informs Sylva that if she marries Edwin without first having achieved noble rank through some other route, her role in society could be merely that of a Gypsy Princess should she go through with the marriage, Sylva realises that she is better than them and has a brighter future than them. She purposefully embarrasses Edwin and his father, turning her back on them and leaving in the presence of their assembled friends.
Act III
Feri has accompanied the cabaret troupe from Budapest to Vienna just before the troupe prepares to leave on another American tour with Sylva. Feri recognises Edwin’s mother as a retired cabaret singer from Budapest, whose star once shone prior to Sylva’s time. Edwin’s mother decides to join Sylva, Edwin, Boni and Stasi on the trip to America. All of them are, however, unaware that this trip will, effectively, save their lives due to the outbreak of the war after the assassination of the Crown Prince!