Based on the operetta of the same name.

Poor New York shop girl Nadina receives the unexpected news that she is next in line to be queen of an Eastern European country. On her arrival in Ruritania, a revolution is in progress, and only minutes before her coronation, Nadina is forced into exile. She flees to Paris with her nurse, and then travels on to Switzerland. There Nadina encounters the Ruritanian revolutionary leader Carl, recuperating from the trials of revolution, and the couple unexpectedly fall in love. When the revolution collapses in Ruritania, they return and marry, thus forming a constitutional monarchy supported by all the people.

The story follows a movie crew who is filming a musical in a small and idyllic alpine village. After their temperamental leading lady drops out of the film, they decide to replace her with the village's young post office clerk Gretl, who returns to Berlin with them. There she has to struggle with the movie's all-male crew, who all try to woo and win her.