The villagers of Montalto are excitedly awaiting the arrival of a commedia dell'arte troupe. After their triumphant entrance into town, Canio, the leader of the strolling players, address the cheering crowd and announces that the evening performance will commence at 11pm. Just as he is leaving, a villager jets that Tonio the Clown is head over heels in love with Canio's wife Nedda. And indeed, when Tonio and Nedda are left alone, he expresses his deep adoration for her, upon which she coldheartedly rejects him and scornfully laughs at him. Nedda already has a lover: Silvio. The two of them decide to run off together that same night, when they are surprised by Canio. Silvio manages to escape through the window but Nedda is left behind, threatened by her furious husband. Although she does not relent, Canio eventually seems to compose himself, keeping in mind that the evening performance has to get under way.
And so, after a brief intermezzo, begins the commedia dell'arte piece, in which art tragically imitates life: Canio as "Pagliaccio," Nedda as stories on stage: Colombina passionately awaits her lover, when she is surprised by the scorned Taddeo. Vengefully, he informs her husband of his wife's sinful little secret. Jealous and full of rage, Pagliaccio confronts Colombina. He is unable to contain himself and while the audience mistakes his intensity for great acting. Canio loses sight of what is reality and what is make-believe. In a frenzied fit of anger, he stabs Nedda. Silvio, who has been in the audience all along, jumps up on stage to save his lover, and Canio stabs him as well.