Time: Beginning of the 19th centuryPlace: The village of Velikiye SorochyntsÑ–, near Poltava
At the fair, merchants are peddling their wares to the crowd of visitors arriving from all around. The Gypsy makes reference to a red jacket that the devil is looking for, while the lad Gritsko woos Parasya. Her father, Cherevik, at first is indignant at this forwardness, but, after realizing that Gritsko is the son of a close friend, he agrees to let Gritsko marry his daughter. The two men go into the tavern to celebrate, as evening settles and the people disperse.
Cherevik and his buddy, Kum, comes out of the tavern in a drunken state. After they wander around in the dark, Khrivya, Cherevik's wife, comes out of their house, and he announces Parasya's engagement. But Khivrya objects, and, while Gritsko overhears, drunken Cherevik concedes that the wedding will not happen. Gritsko, alone, bemoans his sadness. The Gypsy enters, and the two make a pact: Gritsko will give the Gypsy his oxen for fifteen rubles if the latter can make Cherevik change his mind.
Intermezzo: Dream Vision of the Peasant Lad
Alone, Gritsko falls asleep and has a dream involving witches and devils. They are dispelled by church bells.
Inside Kum's house, where they are lodging, Khivrya quarrels with Cherevik, getting him to leave, so that she may keep her secret rendezvous with Afanasy Ivanovich, the son of the village priest. When the latter arrives, she offers him her culinary delicacies, which he devours. In the midst of their amorous encounter a knock is heard at the door. Afanasy hides on a shelf, and in walk Cherevik and Kum, with friends, alarmed by a rumor that someone has seen the red jacket and the devil. Kum begins to give more of the legend, concluding with the remark that the devil appears every year at the fair with a pig's face, looking for the red jacket. Suddenly a pig's snout is seen in the window, and everyone runs about in confusion.
On a street, as a result of the superstitious confusion of the previous scene, Cherevik and Kum are being chased by the Gypsy and some lads. The latter accuse the two older men of stealing a mare, and tie them up. Gritsko enters, extracting a promise from Cherevik to have the wedding to Parasya the next day, and the two older men are released.
On a street in front of Kum's house, Parasya at first is sad about Gritsko, but then cheers herself up with a little hopak, in which Cherevik joins without her noticing. Kum and Gritsko enter, and Cherevik blesses the two lovers, only to be met by Khivrya's rage, which prompts the Gypsy to call on the lads to restrain her. The people celebrate the wedding with a gopak.