The story opens in the Teahouse of Ten Thousand Joys, owned by the Chinaman Wun-Hi & staffed by a bevy of beautiful Geisha.
The girls are excited by the arrival of the crew of the H.M.S. Turtle, led by Leftenant Reggie Fairfax. Reggie is particularly interested in the head geisha Mimosa, but she is in love with Katana, a soldier. Mimosa is also pursued by the Marquis Imari, a local dignitary who intends to marry her. The Marquis himself is pursued by the French in-house Interpreter Juliette.
Reggie insists on having his tea served personally by Mimosa and, once they are alone, starts flirting with her. Mimosa is naturally suspicious of the intentions of an English sailor, and warns him off in a rather elliptical fashion with her tale of 'The Amorous goldfish'.
Lady Constance, a touring English artistocrat, catches Reggie engaged in his tete-a-tete with Mimosa and reminds him that he is already engaged to Molly Seamore back in England. However, Reggie says that he believes in spreading the great British way of life, and gives Mimosa a lesson in kissing.
The Marquis Imari now arrives on the scene and demands to have tea with Mimosa. When he finds out that his intended bride is consorting with the newly arrived British sailors, he becomes rather annoyed, and, invoking a minor bye-law, closes the Teahouse down, forcing the sale of the girls' indentures later that day.
Reggie's aforementioned fiancee Molly now turns up unexpectedly. Left alone, Molly is joined by Mimosa and Lady Constance who tell her how fond Reggie has become of one geisha in particular. Mimosa then suggests that Molly should dress up as a geisha herself to try and win him back.
It is now time for the sale of the geishas' indentures. Despite the best efforts of the Marquis to buy Mimosa for himself, Lady Constance manages to outbid him and keep her out of his clutches. Unfortunately, she can't stop him from purchasing lot number 2, a charming little geisha called Roli Poli whom nobody has seen before. Only after the Marquis has made his purchase is it revealed that this geisha is actually Molly in disguise.
Act 2 is set in the chrysanthemum gardens of the Imari palace. Molly, still disguised as Roli Poli, awaits her impending marriage to the Marquis, who has taken a distinct fancy to her.
Mimosa then appears to propose a plan by which they could save Molly from her fate: Mimosa will sneak into the bridal suite and exchange the veiled Molly for another veiled bride - Juliette, the French interpreter.
The wedding ceremony starts, and the plan is put into effect: Juliette is exchanged with Molly, and the Marquis unwittingly marries the wrong bride. On discovering the ruse he accepts his fate, philosophically, concluding that "every man is disappointed in his wife at some time or other". Mimosa is now free to marry her lover Katana, and Molly is re-united with Reggie, declaring that she would never marry a foriegn nobleman when she could have a British sailor. As it was put in a certain other Japanese play, "nothing could possibly be more satisfactory!"