After the usual prologue, the maid Bakulavalika appears with another maid. From their conversation we learn that King Agnimitra has seen in the palace picture-gallery a new painting of Queen Dharini with her attendants. So beautiful is one of these, Malavika, that the king is smitten with love, but is prevented by the jealous queen from viewing the original. At this point the dancing-master Ganadasa enters. From him Bakulavalika learns that Malavika is a wonderfully proficient pupil, while he learns from her that Malavika had been sent as a present to Queen Dharini by a general commanding a border fortress, the queen's brother.
After this introductory scene, the king enters, and listens to a letter sent by the king of Vidarbha. The rival monarch had imprisoned a prince and princess, cousins of Agnimitra, and in response to Agnimitra's demand that they be set free, he declares that the princess has escaped, but that the prince shall not be liberated except on certain conditions. This letter so angers Agnimitra that he despatches an army against the king of Vidarbha.
Gautama, the clown, informs Agnimitra that he has devised a plan for bringing Malavika into the king's presence. He has stirred an envious rivalry in the bosoms of the two dancing-masters, who soon appear, each abusing the other vigorously, and claiming for himself the pre-eminence in their art. It is agreed that each shall exhibit his best pupil before the king, Queen Dharini, and the learned Buddhist nun, Kaushiki. The nun, who is in the secret of the king's desire, is made mistress of ceremonies, and the queen's jealous opposition is overborne.