The play first opens in 1890's New York City with Dolly Gallagher Levi, a well-known widowed matchmaker, who is making her way through town to catch a train to Yonkers (Call On Dolly) to attend to one of her clients, Mr. Horace Vandergelder, a successful miser in the hay and feed business. On the way to the train, she meets Ambrose Kemper, an artist who is in love with Vandergelder's niece, Ermengarde, against Vandergelder's wishes. While waiting for the train, Dolly explains to Ambrose why she loves her business (I Put My Hand In) and promises him Vandergelder's consent in marrying Ermengarde. When the train arrives, as Ambrose boards, Dolly confides to her late husband Ephraim Levi that she wishes to be Horace Vandergelder's match and leave the life of solitude she's lived in since becoming a widow.
At the hay-and-feed store, Vandergelder has to put up with Ermengarde's sobs over her uncle's plan to keep her from Ambrose. He reveals that while he marches in the Fourteenth Street Parade and goes to court Irene Malloy, a New York milliner and another one of Dolly's clients, he wants Dolly to take Ermengarde to the city to make her forget about Ambrose. He leaves his two clerks, Cornelius Hackl and Barnaby Tucker, to attend the shop while he's gone and confides to his workers his hope that Irene will consent to be his wife (It Takes a Woman). When Dolly arrives, she learns of Vandergelder's intentions to court Irene Malloy. She tries every trick to dissuade him and finally gets his attention when she mentions she can set him up with another one of her clients, who is an heiress. He agrees to meet the heiress if his courting should fail. Dolly then meets with a reunited Ermengarde and Ambrose and tells them if they win the cash prize at the Harmonia Gardens polka contest, they would have enough money to prove to Vandergelder that they could live together. She also tells them to inform the head waiter, Rudolph, that Dolly was coming back and to set up a chicken dinner for two. Dolly also craftily informs Cornelius and Barnaby that she could set them up with Irene Malloy and her shop assistant, Minnie Fay. Excited by finally having an adventure in the big city, Cornelius and Barnaby close the store and join Dolly, Ermengarde, and Ambrose on the train to New York City. (Put On Your Sunday Clothes)
Meanwhile, Irene awaits for Vandergelder to call on her at the millinery. An eager Minnie asks her why she wants to marry Vandergelder. Irene says that although she doesn't love him, she wants to remarry after the death of her first husband and escape the millinery business. She dreams about her perfect match and how she would attract his attention (Ribbons Down My Back). Minnie alerts her that two men (Barnaby and Cornelius) are coming into the shop. To impress Irene, Cornelius pretends he is a sport from Yonkers looking to find a hat for a lady friend. When he finds out she knows Vandergelder and that he is about to come to the millenery, he and Barnaby panic and hide. Irene tries to hide them while Vandergelder is courting her, but when she accidentally mentions that she was talking to a "Cornelius Hackl", Vandergelder becomes bewildered and demands an explanation. In an instant, Dolly comes to the rescue explaining that Cornelius leads a second life at nighttime in New York city as one of the elite Hackls. When Minnie gives away that there are two men hiding in the store, Vandergelder is ready to expose Irene's "guests". Dolly says that Vandergelder's actions are un-American and reprimands him for it while Irene tries to find a better hiding place for Cornelius and Barnaby. (Motherhood March) A disgusted Vandergelder leaves the millinery for the Fourteenth Street Association Parade. Irene is about to call the cops on Cornelius and Barnaby, but Dolly insists the proper way to handle such tresspassers is to "settle it over dinner". Irene and Minnie demand to be taken to the Harmonia Gardens that night. Trying to get out of the date because they have no money, Cornelius and Barnaby let Dolly know that the dinner would include dancing, and they can't dance. Without hesitation, Dolly instructs them on the finer points of dancing until the two men are transformed in graceful twinkletoes who joyfully escort Irene and Minnie out of the shop. (Dancing)
Later, Dolly runs into Mrs. Rose, an acquaintance from her old neighborhood. Dolly realizes after her visit that she has wasted precious moments mourning her husband's death when she should have been out enjoying life. She speaks to Ephraim again about letting her go off to marry Vandergelder. She promises him that she will turn over a new leaf and enjoy every minute of her life. (Before the Parade Passes By). She joins the crowd at the Fourteenth Street Association Parade where she spots Vandergelder. Although Vandergelder agrees to have dinner at Harmonia Gardens that night with Ernestina Money, the heiress Dolly mentioned earlier, Vandergelder discharges Dolly as his marriage broker. Nevertheless she smiles, says, "Ephraim--he's as good as mine!!!!", and runs off singing a reprise of Before the Parade Passes By to end Act One.
Act Two opens up with Cornelius and Barnaby heading to the Harmonia Gardens with their dates. Not even having enough money to pay for dinner, they suggest walking to Harmonia Gardens instead of taking a limo or a taxi, convincing Irene and Minnie that walking was more "elegant" than taking a limo. (Elegance)
Anticipating Dolly's arrival that night, Rudolph, the head waiter at Harmonia Gardens, orders his waiters to perform their best service tonight. In the Waiter's Galop, the waiters quickly prepare to set the tables and serve the meals in a series of cartwheels, flips, etc. As the patrons are seated and have their meal, Cornelius and Barnaby panic over how they are going to pay for the extravagant meal Irene and Minnie are ordering for them. At the other end of the restaurant, Vandergelder is thoroughly embarrassed by his date, who uses the most atrocious behaviors, such as doing the hootchie-cootchie in the soup. Meanwhile, a crew of elated waiters escort Dolly into the restaurant (Hello, Dolly), ecstatic that their favorite patron has returned for the first time since her husband's death. Vandergelder joins her at a table to tell how awful his evening with the heiress was. In another crafty plan, Dolly tries to convince Vandergelder that he did ask her to marry him but she is not interested. As the evening progresses, Vandergelder's wallet accidentally gets mixed up with Barnaby's purse. Cornelius and Barnaby now have more than enough money to pay for dinner while Vandergelder grows deathly white that he does not have enough money to pay for his dinner with Dolly. The polka contest gets underway-with Ambrose and Ermengarde as contestants! Dolly is asked to be a guest judge for the contest, and during the contest, Vandergelder spots Ermengarde, Ambrose, Cornelius, and Barnaby. They try to escape for Vandergelder causing pandemonium to break out at the Harmonia Gardens restaurant.
However, the police have rounded up all patrons and staff at the restaurant and have brought them to court. Dolly acts as their defense attorney, blaming the whole event on Vandergelder. Cornelius testifies that he did not mean to cause chaos; that something better had happened to him that he will treasure for the rest of his life. He had fallen in love with Irene Malloy (It Only Takes a Moment). The judge is so touched by his testification that he declares Vandergelder guilty and everyone else innocent. Vandergelder lashes out at Dolly that he knew this whole day was all one big plot to get him to propose to her and that he would never ask her to marry him. Dolly convinces him that he was wrong and that she plans to walk out of his life like his niece and his clerks did. (So Long, Dearie)
The next day, Vandergelder receives some unpleasant news: Cornelius and Barnaby plan to open a hay-and-feed store with Irene and Minnie across the street from him and demand their back-salaries from him. Also, Ermengarde wanted her money so she could elope with Ambrose. As they head for the safe, Dolly speaks privately with Ephraim about she wants to escape her life of solitude and how she's waiting for his approval on marrying Vandergelder. Fortunately, the sign comes through. Vandergelder apologizes for his behavior and proposes to Dolly. They agree to make Cornelius and Barnaby partners in the hay-and-feed business and to let Ermengarde marry Ambrose. Dolly grows excited thinking about her new life at the wedding as the company sings the Finale Ultimo.
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