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On 31 December 1899, the Marshovian ambassador to the United States receives word from his impoverished nation's king that Marshovian immigrant Charles Radek has died and left $80 million to his widow, Crystal. The ambassador quickly goes to New York to meet her and is surprised to find that she is young and attractive. After saying that Marshovia is erecting a statue in her late husband's honor, the ambassador convinces Crystal to travel there. Some time later, in Marshovia, the womanizing Count Danilo, who is the king's nephew, leads his troops to the train station to greet the widow Radek. Because Crystal's train is delayed, however, Danilo soon heads for a nearby café, and when Crystal and her secretary, Kitty Riley, finally do arrive, the station is deserted. While Kitty makes arrangements for a carriage, Crystal hears music and wanders toward the café, where Danilo is singing a passionate song to a gypsy girl. Crystal is tempted to approach the handsome count, but Kitty quickly returns and the women travel to the palace. The practical Kitty is unimpressed by Marshovia, but Crystal thinks the country is like something from a storybook. Later that night, after the king discovers that Danilo did not meet Crystal, he berates Danilo and insists that he do his duty and romance her so that she will supply Marshovia with money needed to prevent annexation by Austria. The reluctant Danilo does his duty by singing a romantic song beneath Crystal's window. Although Crystal's interest in Danilo is renewed, he cannot see her in the shadows and when he climbs to her balcony, he is frightened off by a curler-laden Kitty. The next day, the king writes down a list of things for Danilo to consider as part of a romantic day for the widow. Because the palace maids all have crushes on Danilo, they want to sabotage any marriage plans and so switch the card he has written to accompany a rose bouquet with the king's list. After the roses are delivered, Danilo goes to Crystal's quarters and greets Kitty, whom he assumes is Crystal. It is only after he leaves, that Kitty deduces his mistake and gives the roses to Crystal. She is thrilled until she reads the switched card and realizes that the Marshovians did not want to honor her late husband, but are only interested in her money. Despite her infatuation with Danilo, Crystal decides to leave Marshovia and travel to Paris. She and Kitty soon become bored with the sights, but Crystal is worried that if she begins to go out at night, fortune hunters will pursue her. As a ruse, she decides to change identities with Kitty, who is happy to pretend to be the widow Radek, while Crystal, as a lowly secretary, is now pursued for her beauty. One night, while the impoverished Marquis De Crillon is asking "Kitty" to intercede for him with the widow, Danilo checks into their hotel. Crystal immediately rushes upstairs to tell Kitty that she now wants to leave, but when she looks out her window and sees Danilo dressing to go out, her infatuation returns and she decides to follow him. Danilo's carriage stops at Maxim's, the notorious Parisian restaurant, and Crystal follows him in, even though she is told that only a certain kind of woman can enter unescorted. Inside, several women flutter around Danilo, but he is attracted to Crystal, who asks him to light her cigarette, then feigns disinterest and walks away. When Danilo follows her, she says that her name is "Fifi" and she has recently arrived from America. Danilo then invites her to one of the restaurant's private dining rooms. Although nervous to be alone with Danilo, Crystal tells him that she is an out-of-work chorus girl, and he says that he wishes he had money so that he could help her. They then dance a waltz and begin to fall in love. When Danilo says that he will love her forever, she runs out of the restaurant and into a carriage, leaving the perplexed Danilo behind. Back at her hotel, when Crystal is approached by the marquis, she tells him that "Mrs. Radek" has decided to marry Count Danilo. When the depressed Danilo returns to the hotel, Baron Popoff, the Marshovian ambassador to France, confronts him, saying that he must remember his duty. In the morning, a happy Crystal tells Kitty about the previous night and decides to shop for clothes that "Fifi" might wear. When she accidentally encounters Danilo in the hotel lobby, he is ecstatic, repeats his vow of love and says that he wants to take care of her. When Popoff approaches Danilo, interrupting their conversation, Crysal happily agrees to meet him later for lunch. Danilo and Popoff then go to Crystal's suite and, still assuming that Kitty is Crystal, Danilo proposes. A few minutes later, as Crystal returns to her suite, she secretly observes them and is stunned when Kitty reveals the proposal. Kitty tells her that she agreed to give Danilo her answer at a ball at the Marshovian embassy the next night. Although Kitty suggests that they leave Paris immediately, Crystal wants revenge. At the ball, Danilo nervously tells the newly arrived Marshovian ambassador to the United States that he is in love with another woman and cannot marry the widow, even when the ambassador reveals that the situation with Austria is now critical. A few moments later, when Danilo, Crystal, Kitty and the ambassador all meet face to face, Danilo finally discovers Crystal's true identity. Despite his anger over Crystal's deception, Danilo agrees to open the dancing with her and, while they share a romantic waltz, each remembers what they had said at Maxim's. When the music stops, their anger returns, and on the balcony, Danilo points out that it is Crystal, not himself, who places too much importance on money. She then angrily leaves Danilo, who is forced to tell Popoff and the ambassador that she turned him down. On the way out, she and Kitty encounter an elderly man who barks "heads will roll." Although they do not initially realize that the man is the king, when Crystal and Kitty see the royal portrait they begin to worry about Danilo and the others. Meanwhile, Popoff, the American ambassador, Danilo and his aide Nitki contemplate their fate when the king has a box containing a pistol and four bullets delivered to them. A few moments later, the king comes to them and happily reports that Crystal has given up her fortune in order to pay Marshovia's debt. Danilo rushes out so quickly that he does not hear the ambassador say that the debt was actually only a small fraction of her fortune. When Danilo finds Crystal, he says that because she has relinquished all of her money, he is no longer a fortune hunter. She does not correct his misimpression as the happy couple starts to waltz.