While visiting Vienna's famed Prater, Archduke Peter Ferdinand meets Lixie, the daughter of a government official. He falls in love with her--creating a complicated situation for Lixie, who has declared her love for her handsome young piano teacher, Toni. Toni's hopes for a position at the Court Opera--needed so that he can propose to Lixie--are dashed because he lacks a powerful patron. Lixie joins the Archduke for an evening the "Red Salon" in the Hotel Sacher, where she convinces the Archduke to extend his patronage to her "brother" Toni. This leads to embarrassing entanglements all around, but also to a romantic encounter that touches both of them. The next morning, the entire matter becomes a political scandal: Viennese society cannot let an affair between the Archduke and a commoner go unnoticed. Lixie's friend and neighbor Mizzi, a dancer at the Court Ballet, steps forward to help untangle the matter.