ACT I
At the Polka Saloon in the Sierras, the town sheriff Jack Rance, the bartender Nick, and the miners wait for the arrival of saloon owner Minnie. The miners have come to California to seek their fortunes in gold, but they miss their homes and sweethearts.
Everybody loves Minnie, but Rance is her most persistent suitor (despite the fact that he has a wife back East). Rance deals out rough justice to others if they cheat at cards or fight among themselves. And when things get too rowdy, Minnie's presence alone keeps the boys in line.
In her saloon, Minnie guards the miners' gold, which is hidden away in a barrel. The Wells Fargo agent Ashby warns Rance that the bandit Ramerrez is planning to steal the gold; Ashby asks for Rance's help in a raid on the bandit's hideout. Rance refuses to help Ashby and stays at the Polka to court Minnie.
Ramerrez enters the saloon in disguise as the gentlemanly Dick Johnson, hoping to find the gold's hiding place. Minnie had once met "Johnson" on the road to Monterey, where he had presented her with a sprig of jasmine, and they both remember the meeting with fondness. They fall in love, much to the annoyance of Rance.
Ashby returns to the Polka with the captured Castro, one of Ramerrez's bandits. Castro tells Ramerrez that the bandits plan to raid the Polka later in the evening. Rance and the miners run off on a wild goose chase in search of Ramerrez.
Left alone with Ramerrez, Minnie shows him where she has hidden the gold and confesses that she's never been kissed. She asks Ramerrez to join her for supper at her cabin. Ramerrez, deeply moved by her trust in him, calls off the attempt to rob Minnie's saloon.
ACT II
Wowkle, Minnie's maid, helps her to prepare her cabin for a supper guest; they discuss Wowkle's lover, Billy Jackrabbit.
Ramerrez courts Minnie in his disguise as Dick Johnson, and Minnie experiences her first kiss. When they hear somebody coming, Ramerrez hides to protect Minnie's reputation. Rance and the miners burst in. They tell Minnie that her handsome suitor is really the bandit. Rance shows her a photograph of Ramerrez. Minnie thanks them for the information and sends Rance and the miners away, unwilling to turn over Ramerrez to a lynch mob. Rance hides outside the cabin.
Furious that Ramerrez has stolen her first kiss, Minnie sends him out into a snowstorm. She hears a shot, and Ramerrez stumbles back in, bleeding. Minnie hides him in her loft. Rance follows the bandit's bloody trail back to Minnie's cabin. Minnie denies having seen Ramerrez, but blood drips down onto Rance from the ceiling, revealing the bandit's hiding place.
Minnie challenges Rance to a game of poker. The stakes? If he wins, he can kill Rarnerrez and marry her. If she wins, Rance has to leave them both alone. Minnie cheats and wins the bandit's freedom.
Act III
A week later, the miners finally catch Ramerrez. As Billy Jackrabbit prepares the noose, Nick bribes him to delay long enough to get word to Minnie. Minnie breaks up the hanging, holding off the miners with her gun. Rance orders the men to continue, but Minnie then threatens to shoot herself. She finally convinces the miners to let her and Ramerrez begin a new life together. It's never too late for redemption, she explains. Minnie and Ramerrez sing goodbye to California as they head east.