In eighteenth century New Orleans, the townspeople go about their daily business in the Place d'Armes. Étienne Grandet, the son of the colony's acting governor, has just returned from a trip to France, and the young ladies warn him that the pirate Bras Priqué has been attacking ships bound for New Orleans; the town fountain is supposedly haunted by the ghost of a woman he killed. Étienne, unknown to all but his father and his quadroon slave mistress Adah, is really Bras Priqué. He gives his father a share of the profits from his crimes, and his father keeps his identity secret. A band of American woodsmen, farmers, and Indians, led by Captain Dick Warrington and his lieutenant, Sir Harry Blake, arrives into town. They vow to capture Bras Priqué and seek the governor's signature on a warrant for his arrest. They also hope to find wives among the casquette girls, who should arrive in New Orleans any day. These French girls have been grant dowries by the King of France and sent to the New Orleans to marry the colonists. Lieutenant Governor Grandet, Étienne's father, refuses to sign the warrant. He knows Étienne has imprisoned the real governor on a Caribbean island. Étienne seeks to establish Louisiana as a dictatorship under his own command, separate from both France and the burgeoning United States of America. The Lieutenant Governor oversees the girls' arrival, and the men excitedly introduce themselves. A plain-looking girl, Lizette, is ignored by all the men except the boastful Simon O'Hara, Captain Dick's Yiddish servant. After everyone leaves the square, the fragmented song of the "ghost" comes from the fountain. It is not a ghost singing, but an Italian girl who introduces herself as "Naughty Marietta". She was one of the casquette girls, but she ran away from the ship at Mozambique and came to New Orleans on her own. Captain Dick, who met her in Mozambique, sees her by the fountain. He agrees to help her hide, but explains he could never fall in love with her. He and the Italian puppeteer, Rudolfo, agree that she can disguise herself as Rudolfo's son and work at his marionette theatre. Marietta tells Dick that it has been foretold that she will love the man who can complete the melody she sang at the fountain, which came to her in a dream. She asks him to try to complete it. He refuses, but finds himself whistling it soon afterwards. Though Lizette ignores Simon, he tries to impress her. Adah feels that Étienne does not love her anymore and tries to see her future in cards. Marietta, disguised as Rudolfo's son, performs an Italian Street Song for the townsfolk. The Lieutenant Governor announces that a dispatch has come from the King of France offering 10,000 francs for the return of the Contessa d'Altena who exchanged places with her maid and travelled to the colonies as a casquette girl. The Contessa always sings a fragment of a certain tune, and the townspeople recognize it as the ghost's song. Sir Harry Blake, Captain Dick's lieutenant, arrives in the square and accidentally betrays Marietta, noting that she is really a casquette girl disguised as a boy. Étienne insists that Marietta reveal her identity, but she declares that though she is not a boy, she is not the Contessa. Governor Grandet's indecisiveness prevents a fight between Étienne's guards and Dick's men, and Marietta runs off with Rudolfo.
Rudolfo teaches Marietta to work the marionettes, and Étienne asks her to attend the quadroon ball with him, believing that she is the contessa and hoping to marry her. Dick has warned Marietta that the ball is dangerous for a young girl, but she ignores him because she believes that Dick has been flirting with Adah. She agrees to go to the ball, but not as Étienne's partner. The attendees at the Ball are gaily drinking and gambling. Lizette is at the ball, still looking for a husband. Simon has been appointed whipping boy to the Governor's family and has decided to find a better-looking girl than Lizette: he will complete the Contessa's song, and once she is found, she will marry him. Marietta is shocked by the obvious immorality of the ball and asks Étienne to take her home. When Captain Dick arrives, she assumes he intends to see Adah. Though he tells her he has come to protect her, she declares she will have fun for the day and dance with Étienne. Lizette attempts to spark Simon's jealousy by flirting with the Governor, but Simon ignores her. Étienne proposes to Marietta; a marriage to a contessa would legitimize his plan for a Louisiana republic under his control. She asks what he will do with Adah, and he says he will auction her. Marietta leaves him and finds Dick, who realizes he may be in love with her.
Étienne auctions Adah at the ball and Dick buys her so she will not be unhappy with an old and ugly master. Marietta jealously agrees to marry Étienne, announcing that she is the lost Contessa d'Altena. The quadroon girls and Marietta leave to prepare for the wedding. Adah remains with Dick, and he sets her free. She gratefully tells him that if he tears Étienne's right sleeve he will reveal Étienne's real identity: Bras Priqué.
Simon revels in the glory of his new job. Dick tears off Étienne's sleeve and denounces him as the notorious pirate. However, he cannot legally arrest Étienne because Simon, as the family whipping boy, is obligated to take any punishment destined for Grandet family members. The guards carry Simon off and Lizette brokenheartedly follows. Adah tells Marietta about Étienne's true identity, and so she refuses to marry him. The Governor threatens to send her to a convent and locks her in a room. She hears a voice outside completing her song. It is Dick, and they embrace through the window. Étienne discovers them, but Captain Dick's infantry appears before he can take action. They have freed Simon and have come to arrest Étienne and the rest of the pirates. But Étienne relinquishes his claim on Marietta and as Dick and Marietta finally join in their song, Dick and his men allow the pirates to escape without harm.