Orsino, The Duke of Illyria reveals his great love for the rich Countess Olivia who we learn has decided to veil herself for seven years to honor her recently deceased brother's memory. Profoundly impressed by this, the Duke continues his pursuit of Olivia undeterred...
Identifying with Olivia's grief, Viola wishes to serve Olivia but when she learns this will be impossible, Viola instead has the Sea Captain disguise her as a boy so she can serve Orsino, The Duke of Illyria.
Sir Toby, Olivia's cousin is introduced. We quickly discover that he drinks a great deal, keeps late hours and is generally rowdy by nature. Maria, Lady Olivia's maid makes this clear to us in her unsuccessful attempts to quieten Sir Toby down. Maria also reveals Olivia's annoyance that Sir Toby has encouraged Sir Andrew Aguecheek to court her.
Sir Andrew Aguecheek is now introduced, quickly revealing himself to be rich but rather dim (unintelligent). Sir Toby has manipulated Sir Andrew into pursuing Olivia so Sir Toby can continue benefiting from Sir Andrew's great wealth.
Realizing Olivia will not be courted by him, Sir Andrew makes preparations to leave but Sir Toby convinces Sir Andrew to stay a month longer, no doubt so Sir Toby can use Sir Andrew and his great wealth further...
Viola has successfully disguised herself as a man named Cesario. Her success with Orsino has been so great that she is now a favorite with Orsino who believes Viola to be the man named Cesario. As such, Orsino entrusts Cesario (Viola) to express his love for Olivia. Cesario, (Viola) deeply divided by her own love for Orsino, nonetheless dutifully represents Orsino.
Olivia's maid is angry with Feste, Olivia's Clown. Feste redeems himself with Lady Olivia by telling her she should not mourn her brother since he is in a better place, namely heaven. Olivia is pleased, but Olivia's uptight steward, Malvolio is not, regarding Feste as old and lacking in wit.
Olivia gives us an insight into Malvolio's character by saying that he suffers from self-love or is arrogant and vain.
Cesario (Viola) petitions Lady Olivia, eventually gaining her audience. Olivia is quite taken by Cesario but tells him, she cannot return Orsino's affections for her.
Olivia would however like to see Cesario (Viola) again, asking him to come back to report to her how Orsino took the news.
Intrigued by Cesario, Olivia sends Malvolio after him to give back a ring Cesario left behind as an excuse to express her affection for him...
Sebastian, the twin brother Viola feared had died at sea, has also survived the shipwreck. Like Viola he mourns the loss of his sibling, believing his sister Viola to be dead.
Antonio, the man who saved Sebastian's life is touched by Sebastian's loss and decides to follow Sebastian to the Duke of Orsino's court even though he has many enemies there. Sebastian nobly tries to talk Antonio out of this, but Antonio is eventually accepted by Sebastian to travel with him to the Duke's court.
Malvolio catches up with Cesario (Viola), rudely returning Cesario's ring to him. Cesario is confused, he left no such ring at Lady Olivia's house. Malvolio also conveys Olivia's desire that Cesario return to confirm that Orsino has accepted the fact that she does not love him.
Cesario now realizes that the ring is a ploy by Olivia to express her affections for him. Realizing she has charmed Olivia, Cesario remarks that Olivia would do better chasing a dream than a man who really is a woman (Viola) in disguise. Cesario is distressed by this mess and hopes time will undo this tangled web.
Late at night, Sir Toby, Sir Andrew and later Feste the Clown are enjoying some late night drinking and singing. This gets Maria's attention who warns all three men to quieten down lest Malvolio notices.
The three men ignore Maria. Malvolio arrives, warning the men that he will speak to Olivia about this noise. The three men ignore him as they did Maria and now Malvolio threatens to make Maria look disrespectful in Olivia's eyes if she does not quieten these three men down.
Maria, resenting Malvolio's heavy-handed arrogance hatches a plan to write a letter, which will convince Malvolio that Olivia loves him. This news quietens down all three men, who each dislikes Malvolio but now are all enthusiastic accomplices in his downfall. Sir Toby, Sir Andrew and Feste will hide near where Malvolio will discover the letter so they can all enjoy what in their eyes is Malvolio's rightly deserved humiliation...
Orsino notices that Cesario (Viola) is in love. Cesario describes this person in terms that precisely describe Orsino but Orsino does not realize this. Cesario warns the Duke that Lady Olivia may not love him but Orsino refuses to even accept such a possibility.
Cesario (Viola) remarks on the unreliability of men in relationships. Cesario starts to reveal "his" own past but quickly becomes vague when Orsino becomes too curious.
Orsino sends Cesario once more to Lady Olivia with a large jewel as a token of his love for her... Maria tells Fabian, Sir Toby and Sir Andrew, all of whom hate Malvolio, that she has penned the letter that will convince Malvolio that Lady Olivia loves him.
Malvolio, meanwhile having not yet found the letter, starts entertaining the idea that Olivia could love him and that he could marry her.
Malvolio picks up Maria's counterfeit letter with its instructions that Malvolio be rude to kinsman like Sir Toby. It also suggests that he wear yellow stockings and be cross-gartered to win Olivia's love.
Maria explains to Sir Toby and company, that Lady Olivia hates yellow stockings and cross-gartered fashion and so Malvolio will be humiliated before Lady Olivia.