Its heroine, Raina Petkoff, is a young Bulgarian woman engaged to Sergius Saranoff, a battlefield hero whom she idolizes.

On the night after the Battle of Slivnitza, Captain Bluntschli, a Swiss mercenary in the defeated Serbian army, climbs in through her bedroom balcony and threatens her not to give the alarm.

Bluntschli's businesslike attitude to war shocks the idealistic Raina, especially after he admits that he uses his ammunition pouches to carry chocolates rather than pistol cartridges.

Raina and her mother are shocked when Major Petkoff and Sergius reveal that they have met Bluntschli before and invite him to lunch (and to help them figure out how to send the troops home).

Bluntschli gets a telegram informing him of his father's death: he must now take over the family's luxury hotels in Switzerland.

After Bluntschli confesses the whole story to Major Petkoff, Sergius proposes marriage to Louka (to Major Petkoff and Catherine's horror); the manservant Nicola quietly and gallantly lets Sergius have her; and Bluntschli, recognising Nicola's merits, offers him a job as hotel manager.

Raina, realizing the hollowness of her romantic ideals, protests that she would prefer him as a poor "chocolate-cream soldier" than as a wealthy businessman.

The play ends as Bluntschli, with Swiss precision, arranges the major's troop movements and informs them he will return to marry Raina in exactly two weeks.