In Magda’s Paris home, Prunier tells the women that love and passion are all the fashions of Paris. He sings his latest composition. Magda is intrigued, but she is a kept woman, supported by Rambaldo. She accepts Rambaldo’s presents, but admits she does not love him. Magda remembers the night she escaped her ever-watchful aunt and went dancing. She fell in love with a young student, but they parted. Prunier predicts each woman’s future. Ruggero enters with a letter of introduction to Rambaldo. Rambaldo ask Prunier how his guest should spend his first night in Paris. Prunier scoffs but everyone gathers around, offering sightseeing suggestions. Magda’s guests take their leave. Prunier meets Lisette in secret. He is fascinated by the maid, he admits. On a sudden inspiration, Magda disguises herself as a grisette and leaves for the cabaret.
The customers at Bullier sing, dance, and drink. Magda is accosted by several students. She dances with Ruggero and they fall in love. Prunier scolds Lisette. The maid recognizes Magda, but Prunier convinces her it is a different person. They introduce themselves and Lisette confesses to Magda that she borrowed her mistress’s clothes without permission. The crowd showers the four lovers with flowers. Rambaldo appears. At Magda’s insistence, Prunier hurries Ruggero away. Rambaldo recognizes Magda and demands an explanation. She says she loves Ruggero and means to stay with him. Magda and Ruggero vow their eternal love.
Ruggero and Magda have escaped to a cottage on the Riviera. He wonders how they will pay their bills and confesses that he has asked his parents for permission to marry her. She is overcome and realizes she must tell him the truth. After Lisette’s disastrous and brief stage career and Prunier’s constant criticism, Lisette begs Magda for her old job back, and Magda agrees. Prunier points out to Magda that she cannot live this way forever and transmits a message from “one who would help her.” Ruggero returns with a letter from his parents: They have agreed to the marriage. Magda confesses her past. Fulfilling Prunier’s prediction, she bids her grief-stricken lover farewell—and flies back to her former life.