On the parade ground of The Gerolstein Military Academy preparations for a new campaign are underway. The camp is full of girls who have come to cheer the soldiers on. Fritz, a very second-class private and a reluctant participant, has caught the eye of Wanda and meets her to say goodbye before joining the battle. His superior, General Boum, orders the girls to leave and forbids the lovers to see each other; they ignore him.

Baron Puck arrives and reports that the war has been declared solely for the amusement of the bored Grand Duchess; she arrives with entourage and inspects her departing soldiers. Fritz, apparently oblivious to her, piques her interest. To secure his affection she promotes him to Captain, angering the General.

The modish, vain Prince Paul, who would benefit from marrying the Grand Duchess, arrives in high style to impress her; he is a laughingstock in the society pages. But she rejects him again, her eyes now firmly on Captain Fritz. When the generals in charge explain their convoluted battle strategy, Fritz suggests a far superior plan and is promoted again, this time to General-in-Chief. The Grand Duchess publicly gives Fritz her late father’s sabre. The Generals swear vengeance on Fritz and the real war begins.

A ballroom. The Grand Duchess has been keeping track of the war. Her ladies-in-waiting receive letters telling them the battle is won and the boys are returning. Jealous of Fritz’s success, General Boum, Prince Paul and his own General Grog plot his assassination.

General Fritz and his army return triumphant, and the newly confident Fritz tells of his cleverness in winning by getting the opposition drunk. The Grand Duchess declares her love for him, but Fritz stays true to Wanda and asks the Grand Duchess to sign their marriage contract at that evening’s ball. Furious, she joins with the plotting generals. A secret passage is revealed behind a statue that leads to Fritz’s dormitory; this will be the key to their plan.

The ball begins, the notary and wedding cake arrive, but the Duchess vacillates. She eventually signs the marriage contract — but only just before striking up the orchestra in a rousing rendition of her grandmother’s carillon, which raises the roof.

The Grand Duchess is alone in the bridal bedroom. She considers the violence the walls of Gerolstein have seen and how her crime is no different. The would-be assassins arrive and sharpen knives. The wily General Grog, to whom she has taken a shine, suggests to the Duchess that were she to marry Prince Paul she would be able to see him all the time. Sold on the idea, she cancels the assassination, as it wouldn’t do to have such an event on her wedding day.

Fritz and Wanda are brought to the bridal suite. They eagerly prepare to consummate their marriage, but Boum and his cronies interrupt them, heatedly describing an enemy counter-attack and demanding that Fritz return to battle. Distraught and half-dressed, Fritz is forced onto horseback and leaves to do his duty.

A wedding breakfast is in full swing on the Gerolstein parade ground in honor of Prince Paul and the Grand Duchess’s wedding. She is informed that the generals have played a nasty practical joke on Fritz. Disheveled and battered, he returns. He is demoted back down the ranks and, having tasted power, is content to spend the rest of his life with no rank as long as he has Wanda. Discovering Baron Grog has a wife and children; the Duchess resigns herself to her future with Prince Paul.

Peace and order returns to Gerolstein.