Sally Adams, Washington's "hostess with the mostes'," is named Ambassador to the Grand Duchy of Lichtenburg - a tiny kingdom steeped in royal custom and rapidly changing coalition governments. Kenneth Gibson, an eager young diplomat, is assigned to be her aide. True to her almost total disrespect for protocol, Sally arrives late in Lichtenburg. There she encounters foreign minister Cosmo Constantine, not, however, to the degree her romantic nature would like. Worse yet, Cosmo refuses American foreign aid. Sally gets talked into a scheme to get Cosmo elevated to Prime Minister to make way for a new foreign minister eager to accept American money to "save" the country.
When the loan is all but consummated, Cosmo finds out about it and resigns. This ruins all possibilities for another coalition, and the country must hold its first general election in twenty years. Sally openly campaigns for Cosmo, forcing her recall to Washington for becoming involved in another government's internal affairs. Kenneth, too, commits a grave diplomatic error by falling in love with the Princess Maria and arranging secret meetings with her. However, a spirit of democracy is over Lichtenburg. The princess is granted permission to ask Kenneth to marry her. Elected Prime Minister, Cosmo visits Sally in Washington to grant her the royal order of Dame and revive their "acquaintance."