Gentlemen of the Japanese town of Titipu are gathered ("If you want to know who we are"). A wandering musician, Nanki-Poo, enters and introduces himself ("A wand'ring minstrel I"). He inquires about his beloved, the maiden Yum-Yum, a ward of Ko-Ko (formerly a cheap tailor). One of the gentlemen, Pish-Tush, explains that when the Mikado decreed that flirting was a capital crime, the Titipu authorities frustrated the decree by appointing Ko-Ko, a prisoner condemned to death for flirting, to the post of Lord High Executioner ("Our great Mikado, virtuous man"). Ko-Ko was "next" to be decapitated, and the Titipu authorities reasoned that he could "not cut off another's head until he cut his own off", and since Ko-Ko was not likely to try to execute himself, no executions could take place. However, all officials but the haughty Pooh-Bah proved too proud to serve under an ex-tailor, and Pooh-Bah now holds all their posts-and collects all their salaries. Pooh-Bah informs Nanki-Poo that Yum-Yum is scheduled to marry Ko-Ko on that very day ("Young man, despair").
The Mikado and Katisha arrive in Titipu with little notice, but accompanied by a large procession ("A more humane Mikado"). Ko-Ko assumes that he has come to see whether an execution has been carried out. Aided by Pitti-Sing and Pooh-Bah, he gives a graphic description of the supposed execution ("The criminal cried") and hands the Mikado the certificate of death-signed and sworn to by Pooh-Bah as coroner and noting, slyly, that most of the town's important officers (that is, Pooh-Bah) were present at the "ceremony". However, the Mikado has come about an entirely different matter-he is searching for his son. When they hear that the Mikado's son "goes by the name of Nanki-Poo", the three panic, and Ko-Ko says that Nanki-Poo "has gone abroad". Meanwhile, Katisha is reading the death certificate and notes with horror that the person "executed" was Nanki-Poo. The Mikado, though expressing understanding and sympathy ("See How the Fates"), discusses with Katisha the statutory punishment "for compassing the death of the heir apparent" to the Imperial throne-something lingering, "with boiling oil... or melted lead". With the three conspirators facing painful execution, Ko-Ko pleads with Nanki-Poo to return. Nanki-Poo fears that Katisha will order his execution if she finds he is alive, but notes that if Ko-Ko could persuade Katisha to marry him, then Nanki-Poo could safely "come to life again" as Katisha would have no claim on him ("The flowers that bloom in the spring"). Though Katisha is "something appalling", Ko-Ko has no choice: it is marriage to Katisha, or a painful death for all three.
Ko-Ko discovers Katisha mourning her loss ("Alone, and yet alive") and throws himself on her mercy. He begs for her hand in marriage, saying that he has long harboured a passion for her. Katisha initially rebuffs him, but is soon moved by his pleadings ("Tit-willow"). She agrees ("There is beauty in the bellow of the blast") and, once the ceremony is performed (by Pooh-Bah, the Registrar), begs mercy for him and his "accomplices" from the Mikado. Nanki-Poo and Yum-Yum then re-appear, sparking Katisha's fury. The Mikado is astonished that Nanki-Poo is alive, when the account of his execution had been given with such "affecting particulars". Ko-Ko explains that when a royal command for an execution is given, the victim is, legally speaking, as good as dead, "and if he is dead, why not say so?" The Mikado deems that "Nothing could possibly be more satisfactory", and so Titipu celebrates ("For he's gone and married Yum-Yum").