A fire breaks out at a Viennese café. Upstairs, an oblivious Johann 'Schani' Strauss is playing his compositions to his girlfriend Theresa 'Rasi' Ebeseder. When rescued via the window, Rasi loses her skirt, and runs into the building next door in search of a replacement.
Following her, Schani encounters the Countess Helga von Stahl, and reveals that he is the son of the celebrated composer Johann Strauss, but despite this no-one is interested in publishing his own compositions. The Countess commissions a piece, promising a suitable text the next day.
At her home, her husband the Prince mistakes her written lyrics for a draft of a love poem intended for him. He talks to her from his bath (via amorous servants modifying certain details), discussing amongst other things the colour of the river Danube.
The elder Strauss rehearses his orchestra, with Schani on violin. Schani says that he'd like to write a better waltz than his father's 'Lorelei'. Strauss challenges him to play a composition and ridicules it, similarly deriding a text the Prince has asked him to set to music.
Schani plays for the Countess, but is frustrated at his lack of inspiration. With her encouragement, they develop his new piece together. This turns into a love duet, which is echoed by Rasi, sitting alone in the garden.
The Prince returns, and is furious to hear of Strauss' rejection of his text. He is introduced to Schani, and realizes that this means the name "Strauss" can appear on his manuscript after all.
Rasi tells her father that she's engaged to Schani. Ebeseder is unhappy at the prospect of an artist son-in-law, but offers to show Schani his bakery. Schani finds musical inspiration in the workers' rhythms.
Schani plays the Countess his new composition, the 'Blue Danube' waltz. She is enchanted, and kisses him. Rasi is similarly enraptured when she hears it, and asks for a dedication. Since it is already dedicated to the Countess, Schani produces two different front pages.
The Countess persuades music publisher Anton Drexler to publish the waltz. Meanwhile, Rasi shows her copy to Strauss, who dismisses it out of hand. Leaving Strauss' rehearsal room in tears, Rasi overhears the waltz, finds Schani and the Countess performing it - and discovers the double dedication. She says she never wants to hear it again.
Mortified, Schani promises that he'll give up his music for her, and goes to work for Ebeseder. The Countess asks him to attend St Stephen's Festival. Rasi objects, but Schani refuses to be dictated to.
A chance remark by Drexler about the Prince's short temper helps the Countess devise a scheme exploiting his dislike of Strauss. Visiting him before the concert, and surreptitiously adjusting his watch, Drexler asks Strauss to visit the Prince, who has news of a possible decoration from the Emperor. This appeals to Strauss's vanity, and he mistakenly believes he has enough time before the concert.
Drexler and the Countess try to find Schani, who is having a heated argument with Rasi. As the impatient crowd cry "We want Strauss!", the Countess persuades Schani to mount the podium by saying that it's his one chance to achieve greatness.
The 'Blue Danube' waltz is performed, and receives a standing ovation. Strauss finally appears as it ends, and is furious, blaming Schani for the subterfuge. Despondent, Schani goes to find Rasi. The Countess follows him. Strauss sarcastically congratulates the Prince for making a fool of them both, as the Countess is clearly having an affair with Schani. Enraged, the Prince runs after them.
In Schani's apartment, the Countess apologises to him, saying that she didn't realise how happy he was, and warns him that after the evening's triumph his life will never be the same.
The Prince bangs on the door, and the Countess hides in the back room. Schani pleads ignorance, but the Prince recognises her discarded scarf. As the men quarrel, the Countess slips out of the window, walks round and knocks on the door. The Prince is fooled, and the couple are reconciled, as are Schani and Rasi.
By the now deserted bandstand, a little girl asks Strauss for his autograph. He signs it - adding the word 'Senior'.
