The play is set in Bath in the 18th century, a town legendary for conspicuous consumption and fashion at the time. People would travel there to take the waters which were believed to have healing properties. The town was much less exclusive than London, and provides an ideal setting for the characters.

The plot centres around two characters: Lydia Languish and Captain Jack Absolute. Lydia is obsessed with the romantic ideals of love she reads in popular novels of the time, and is drawn into a relationship with Captain Absolute, who pretends to be a poor soldier called Ensign Beverly. Lydia finds the idea of eloping with a poor soldier romantic. In reality, Captain Absolute is a rich gentleman, the son of Sir Anthony Absolute. Both Sir Anthony and Mrs Malaprop, Lydia's aunt, want to prevent their secret romance. Mrs Malaprop wants Lydia to marry for financial reasons.

The marriage arranged by Sir Anthony is, in fact, with Lydia, but when Lydia finds out who Ensign Beverly really is, she refuses to marry him, clinging to her romantic notions of eloping with a poor soldier.