In the palace of Mustafa, Bey of Algiers, the ruler has grown weary of his obedient and modest wife Elvira and desires to marry a daring and seductive Italian. He orders his corsair captain Ali to find him a foreign beauty. Mustafa offers his favorite Italian slave, Lindoro, Elvira's hand in marriage. Resisting the ruler's whim, Lindoro lists the qualities his bride should possess, but Mustafa leaves the youth with no choice.
On the seashore, corsairs led by Ali divide the spoils from a shipwreck. Among the captives is the Italian Isabella, who set out in search of her beloved Lindoro accompanied by her new suitor Taddeo, who she presents as her uncle. Taddeo is terrified at the thought of captivity, but Isabella is confident in her power over any man.
In the Bey's palace, neither Lindoro, faithful to his beloved, nor Elvira, whose heart belongs to Mustafa, wish to unite their destinies. However, when the Bey promises to send Lindoro back to his homeland with a bag of gold if he takes Elvira with him, Lindoro agrees. The Bey is informed of the captured Italian woman. In despair, Elvira begs Lindoro to bid Mustafa farewell before leaving.
The Bey's concubines and eunuchs praise the invincible Bey. Isabella captivates Mustafa with her beauty; he completely loses his head and immediately grants her request to pardon Taddeo, who had angered captain Ali. Lindoro, arriving with Elvira and Zulma to bid the Bey farewell, unexpectedly encounters his beloved. Discovering that Mustafa is ready to forsake his wife for her, Isabella rejects his advances and demands the slave Lindoro for herself. Mustafa, driven mad with passion, becomes the laughingstock of all: from a lion, he has turned into a donkey.
In the palace, they discuss Mustafa's romantic follies. Ali assures Elvira that the cunning Italian will soon be exposed. Mustafa sends Isabella an invitation to coffee, boasting that he will soon conquer the beauty. Meanwhile, Lindoro tries to convince Isabella that he never intended to marry Elvira. The lovers agree to meet and devise an escape plan.
Taddeo, pursued by an executioner, begs for the Bey's mercy, and Mustafa grants him the title of Kaimakan (viceroy). The eunuchs praise Taddeo, dressed in Turkish attire, turban on his head, and sword in hand, as the great Kaimakan, protector of Muslims. In return, the Bey demands that the "uncle" help him win over the "niece."
Elvira informs Isabella that Mustafa intends to have coffee alone with her. The cunning Italian suggests the unlucky rival observe from the next room how to manage husbands. Preparing to meet the Bey, Isabella realizes he is spying on her. She skillfully pretends to want to impress her suitor. Lindoro and Taddeo admire her from afar. Mustafa, anticipating the meeting, begs the "uncle" to leave him alone with Isabella once he gives the signal - sneezes. However, the Kaimakan refuses to notice any signs, driving the Bey to rage. Adding to this, the Italian invites Elvira for coffee. The scene ends in utter chaos.
Ali reflects on Italian women, one of whom has made the Algerian Bey a fool. Lindoro and Taddeo quarrel, each believing himself Isabella's only lover. Nevertheless, they must unite to execute her audacious plan. Lindoro assures Mustafa of Isabella's love, as she prepares a ceremonial initiation for him into the honorary order of Pappataci (Italian pappataci - "mosquitoes," metaphorically "do-nothings"). Accomplices explain to the Bey what it means to be a Pappataci: he must eat, drink, sleep, and indulge in pleasures. Mustafa is enchanted by this future.
At Isabella's command, numerous bottles of drinks are prepared for the celebration, and she herself urges the Italian captives to prepare for escape. In the presence of numerous Pappataci (disguised slaves), Mustafa is ceremoniously inducted into the order. Taddeo reads the oath, meekly repeated by the Bey: "To look and not see, to listen and not hear, to eat and enjoy, to allow everything to be done and said as one pleases."
A ship docks at the terrace; sailors and slaves are ready to set sail. Seeing Isabella and Lindoro rushing to the vessel, Taddeo realizes he's been deceived and appeals to Mustafa. However, the Bey now reminds him of the Pappataci's oath. Taddeo, unsure of what to do, eventually flees with the lovers. Mustafa, understanding too late that he's been tricked, has no choice but to wish the cunning Italians a safe journey along with the loyal Elvira. Everyone praises the beautiful Italian, who has proven that a woman can achieve anything she desires.