Die Fürstenbraut is a story of mistaken identities. The Fürst is engaged to be married to Princess Mathilde. Although they have never met, he believes that once, while he was disguised as another man, he became acquainted with Princess Mathilde. However, the woman the Fürst actually met on that occasion was Fräulein Mathilde von Wallerbach. The Fürst has confused the two Mathildes and discovers his mistake as he helps Princess Mathilde out of her carriage and realizes she is not the Mathilde he was expecting. Luckily, Fräulein Mathilde is accompanying Princess Mathilde on this visit. To complicate matters, Major von Sollau, an assistant to the Fürst, privately asks Fräulein Mathilde for her hand in marriage, thinking that the Fürst is happily betrothed to the princess. Fräulein Mathilde is made aware of the mix-up by another member of the Fürst’s household and is informed that the Fürst is in love with her. In light of this information, Fräulein Mathilde asks the princess if she may be released from her duty in order to take care of an urgent situation within her family. Princess Mathilde believes this request indicates that Fräulein Mathilde is in love with the Fürst and wishes to flee.
Meanwhile, the Fürst has decided that he will not marry the princess and declares himself willing to take all the shame that will come of the broken engagement. On his way to tell the princess of his resolve he encounters Fräulein Mathilde. She explains she is leaving and the Fürst objects. The Fürst believes that the princess is sending Fräulein Mathilde away, which the princess denies, explaining that Fräulein Mathilde requested permission to leave. Princess Mathilde is confused about how upset the Fürst is. Although he seemed like such a kind man from the letters they exchanged, he now seems so cold. Despite her misgivings and a warning from a member of the household that she should not marry the Fürst, Princess Mathilde maintains that she will stand by him in everything as she has promised. The Fürst decides to speak to his assistant, Major von Sollau, in hopes of receiving some good counsel. Major von Sollau reveals that he is planning on marrying Fräulein Mathilde.
The princess receives a letter from the Fürst, the contents of which lead her to the decision to enter the Marienstift cloister, there to wait for word from her father. Before leaving, she calls for Fräulein Mathilde and instructs her not to give up a chance to marry the Fürst, who loves her. The Fürst learns of the princess’ plan and reads the letter that she had tried to send to her father. As he reads the letter, he realizes that the princess really is the kind, wonderful woman who he fell in love with during their written correspondences. Princess Mathilde arrives at the Fürst’s chamber to announce her departure. The Fürst apologizes for his behavior and declares his love for her. They are to be married that evening, and Major von Sollau and Fräulein Mathilde are happily engaged.