When the beggar/tinker Christopher Sly refuses to pay for breaking drinking glasses, the Hostess goes to fetch a constable to have the tinker arrested. Meanwhile, Christopher Sly falls asleep when a Lord, with his Huntsmen, enters the scene.
The Lord orders his Huntsmen to take good care of his hunting hounds. Assuring the Lord that the hounds will be taken good care of, the Huntsmen share their thoughts about the relative merits of the respective hounds when the Lord notices Christopher Sly, who seems dead. Realizing the beggar is drunk and asleep, the Lord decides to have a little fun: The Lord has the beggar taken to his house and then orders his subordinates to treat the beggar as if he were a lord and a nobleman when he wakes.
Presently, a company of actors arrive to entertain the Lord. The lord welcomes them and tells them to do likewise and treat the beggar as if he were a lord. The actors agree to do so, and the Lord makes it a point to coach his Page in playing the part of the beggar’s lady and wife, which will be crucial in making the joke a success.
When Christopher Sly awakes from his drunken stupor, he cries out for more ale only to be offered Spanish wine, sweatmeats of fruit, clothing befitting a nobleman, and to be addresses as a lord. Confused, Christopher Sly asserts that he is nothing more than a commoner by birth and a tinker by profession—to no avail. The Lord assures that Sly is a nobleman, a claim the Servingmen unanimously avow. Presently, the Lord’s Page, who is disguised as a lady and wife, enters and scene and insists that Sly is in fact a nobleman, that she is his lady and wife, and that Sly has been mentally ill for 15 years, which accounts for Sly believing himself to be nothing more than a beggar. Somewhat convinced that he is in fact a lord, Sly asks his servant to leave so that he may reacquaint himself with his wife only to be told that Sly would risk a relapse of his mental faculties if he exerted himself too vigorously and too soon.
By and by, Sly is told that a company of actors are ready to perform a play for him, and that observing the play would be good for his health. Sly agrees to watch the play.