Princess María Louisa, bored with the stuffy and morose atmosphere of the court palace, dresses like a peasant girl and goes to the village fair with her maid, Renée, where she meets Karol, the King of the Gypsies. The Grand Duke Alejandro, her fiancé, who is more interested in affairs of the state than of the heart, pursues her and finds her kissing Karol, whom she then threatens to have imprisoned for his transgression. María Louisa loses her brooch, and Alejandro insists that Karol stole it. The coach driver finds the brooch and returns it to Alejandro; however, he continues to insist on Karol's guilt. Karol believes that he has been arrested for kissing the princess and so confesses to the crime. While serving his sentence of seven days of hard labor, he works in the royal kitchen, where he makes a "love salad" which María Louisa adores. When she discovers that he is the salad's creator, however, she retracts her praise. Renée reveals to the princess that she saw the coachman give the brooch to Alejandro, and María Louisa goes to apologize. She discovers Karol and Alejandro fighting, and Karol then escapes the palace, taking María Louisa captive. At the gypsy camp, María Louisa insists on working like the others. Remetz, also taken to the gypsy camp by force, escapes and alerts Alejandro, who arrives at the camp with an army. Karol and Alejandro duel in the woods, and after Alejandro shoots a hole in Karol's hat, he flees in fear of Karol's better aim. Karol orders that the gypsies break camp and tells María Louisa that their paths crossed happily but that he must move on. María Louisa sadly watches his caravan recede in the distance.