In a Palace Garden
King Sergei of Sebilia is having a meeting with Prince Casimir and Prince Nicolai to discuss dispersion of troops when he is interrupted by his two daughters, Sofia and Irina. They are excited about their father’s upcoming masquerade ball and want to show him their new dresses.
The meeting is again interrupted by the King’s messenger who delivers news of an assassination attempt on the King. The King’s two daughters eavesdrop at the garden window. After the meeting the princes wander out into the garden where Casimir is further enchanted by Sofia.. Sofia is enamored but the threat to her father’s life plagues her.

Gypsy Camp
She decides to go to the gypsy camp to have her fortune told by the gypsy queen. Despite her reluctance, Irina accompanies her sister. Though the gypsies are a little wary of newcomers they are soon persuaded by a little gold. Sofia ex-plains she wants to talk to the gypsy Queen and have her fortune told. They invite the sisters to sit at the campfire and warm themselves before being taken to the gypsy queen. The gypsy queen agrees to tell her Sofia her fortune, but when she draws the death card the gypsy will only elude to her future.

Palace Garden
Scared, the girls run back home still clutching the death card. They find
their mother in the garden picking flowers for the evening ball. She consoles and calms them and tells them fortunes are not real. She takes the card and tells them to get ready for the ball.

Palace Ballroom
As their mother suggested Sofia and Irina leave to dress. With joyful excitement they get ready for the ball. At the lively masked ball the palace is entertained and enchanted by jesters, Spanish, Italian and Cossock dancers and the fortune teller’s prophesy comes true.