Ralph Courtland and Pierre Felix make a $25,000 bet: Pierre contends that he can turn any peasant woman into a socialite in three months, while Ralph maintains that it takes years of breeding to produce a real "lady." They choose Bianca, an organ grinder's assistant, as their test case, and, under Pierre's guidance, she becomes an overnight society sensation. Ralph soon falls in love with Bianca, while Pierre keeps badgering him to pay off on the wager. As a result, Ralph appears to be financially ruined, until Bianca reveals that she is actually the daughter of the King of Montenaro, and had run away and disguised herself to avoid a marriage to the Grand Duke Serdian. Now Pierre has lost the bet, and, infuriated, kidnaps Bianca and tries to take her back to the Grand Duke. Ralph rescues Bianca, however, and marries her immediately, thus ending the Grand Duke's claim to her.