In the late Nineteenth century, on the evening of her engagement party to stodgy Harry Daventry, Sarah Millick foresakes her fiancé for the love of her Viennese music teacher, Carl Linden. After eloping to Vienna, the newlyweds take up residence in Carl's garret, and are welcomed by his friends Max, Ernst and Mama Luden. Sarah inspires Carl to complete the operetta that he is composing, but when he is unable to sell his work, the couple suffer financial hardships. They are at their most desperate when Sarah convinces a local grocer to let her give his daughter singing lessons, but is fired a few minutes later when Carl tries to convince the grocer to hire him to do the job. When the grocer angrily orders them both out, they return to their flat. Their fortunes start to change when Max and Ernst pawn a piece of their furniture to buy some meat and bread, after which the group decides to become street musicians. One afternoon, as they are performing on the streets of Baden, Sarah attracts the attention of Lord Shayne, as well as the lecherous Baron von Tranisch, who gets her a job at Schlick's Cafe. At the cafe, Sarah learns that the Baron is her benefactor when he comes to claim his reward, and she quits her job. She returns to sing, however, when Lord Shayne brings impressario Herr Wyler to hear Carl's operetta. As Sarah performs for Herr Wyler, the drunken Baron accosts her. To defend his wife's honor, Carl fights a duel in which he dies at the Baron's sword. Although Carl dies, he lives on in his music when Herr Wyler agrees to stage his operetta, and Sarah remains in Vienna to star in the production. After the premiere of the opera, Sarah returns to their flat and, knowing that Carl is not dead as long as his music continues, sings to him as she gazes across the Vienese sky