A Mandarin announces the law of the land Popolo di Pekino! - "Any man who desires to wed Turandot must first answer her three riddles. If he fails, he will be beheaded". The Prince of Persia has failed and is to be beheaded at moonrise. As the crowd surges towards the gates of the palace, the imperial guards brutally repulse them, a blind old man is pushed to the ground. His slave-girl, Liù, cries for help. A young man hears her cry and recognizes the old man as his long-lost father, Timur, the deposed king of Tartary. The young Prince of Tartary is overjoyed seeing his father alive but urges him not to speak his name because he fears the Chinese rulers who have conquered Tartary. Timur tells his son that of all his servants, only Liù has remained faithful to him. When the Prince asks her why, she tells him that once, long ago in the palace, he smiled upon her...

The moon rises, and the crowd's cries for blood turn into silence. The doomed Prince of Persia is led before the crowd on his way to execution. The young Prince is so handsome that the crowd and the Prince of Tartary are moved to compassion and call on Turandot to spare his life She appears, and with a single imperious gesture orders the execution to continue. The Prince of Tartary, who has never seen Turandot before, falls immediately in love. As he cries out her name with joy, the crowd screams in horror: The Prince of Persia has been beheaded.

The Prince of Tartary is dazzled by Turandot's beauty. He is about to rush towards the gong and strike it three times; the symbolic gesture of whoever wishes to marry Turandot when the ministers Ping, Pong, and Pang appear and urge him cynically not to lose his head for Turandot but to go back to his own country. Timur urges his son to desist, and Liù, who is secretly in love with the Prince, pleads with him not to attempt the riddles. Liu's words touch his heart. The Prince tells Liu to make exile more bearable and never to abandon his father if the Prince fails to answer the riddles. The three ministers, Timur and Liù try one last time to hold the Prince but he refuses to listen.

He utters Turandot's name three times and rushes to the gong that hangs in front of the palace. He strikes the gong three times declaring himself a suitor. From the palace balcony, Turandot accepts the challenge, as Ping, Pang and Pong laugh at the prince's foolishness.

Ping, Pang, and Pong lament their place as ministers, poring over palace documents and presiding over endless rituals. They prepare themselves for either a wedding or a funeral. Ping suddenly longs for his country house in Honan, with its small lake surrounded by bamboo. Pong remembers his grove of forests near Tsiang, and Pang recalls his gardens near Kiu. The three share fond memories of life away from the palace but are shaken back to the realities of Turandot's bloody reign. They continually accompany young men to death and recall their ghastly fate. As the palace trumpet sounds, the ministers ready themselves for another spectacle as they await the entrance of the Emperor.

The Emperor Altoum, father of Turandot, sits on his grand throne in his palace. He urges the Prince to withdraw his challenge but the Prince refuses. Turandot enters and explains that her ancestor of millennia past, Princess Lo-u-Ling, was ravished and murdered by a foreigner, and now out of revenge she has sworn to never let any man possess her. She warns the Prince to withdraw, but again he refuses. The Princess presents her first riddle "What is born each night and dies each dawn?" The Prince correctly replies, "Hope."

The Princess, unnerved, presents her second riddle "What flickers red and warm like a flame, but is not fire?" The Prince thinks for a moment before replying, "Blood". Turandot is shaken. The crowd cheers the Prince, provoking Turandot's anger. She presents her third riddle "What is like ice, but burns like fire?" As the prince thinks, Turandot taunts him. Suddenly he cries out victory and announces, "Turandot!"

The crowd cheers for the triumphant Prince. Turandot throws herself at her father's feet and pleads with him not to leave her to the Prince's mercy. The Emperor insists that an oath is sacred, and it is Turandot's duty to wed the Prince . As she cries out in anger, the Prince stops her, saying that he has a proposal for her. "You do not know my name. Bring me my name before sunrise, and at sunrise, I will die". Turandot accepts. The Emperor declares that he hopes to call the Prince his son come sunrise.

In the distance, heralds call out Turandot's command: "This night, none shall sleep in Peking! The penalty for all will be death if the Prince's name is not discovered by morning". The Prince waits for dawn and anticipates his victory by singing "Nobody shall sleep!... Nobody shall sleep! Even you, O Princess".

Ping, Pong, and Pang appear and offer the Prince women and riches if he will only give up Turandot, but he refuses. A group of soldiers then drag in Timur and Liù. They have been seen speaking to the Prince, so they must know his name. Turandot enters and orders Timur and Liù to speak. The Prince feigns ignorance, saying they know nothing. Liù declares that she alone knows the Prince's name, but she will not reveal it. Ping demands the Prince's name, and when she refuses, she is tortured. Turandot is clearly taken by Liù's resolve and asks her who put so much strength in her heart. Liù answers "Princess, Love!". Turandot demands that Ping tear the Prince's name from Liù, and he orders her to be tortured. Liù counters Turandot, saying that she too shall learn love. Having spoken, Liù seizes a dagger from a soldier's belt and stabs herself.

As she staggers towards the Prince and falls dead, the crowd screams for her to speak the Prince's name. Since Timur is blind, he must be told about Liù's death, and he cries out in anguish. Timur warns that the gods will be offended by this outrage, and the crowd is subdued with shame and fear. The grieving Timur and the crowd follow Liù's body as it is carried away. Everybody departs leaving the Prince and Turandot. He reproaches Turandot for her cruelty "Turandot: Principessa di morte" and then takes her in his arms and kisses her in spite of her resistance.
 
The Prince tries to convince Turandot to love him. At first she is disgusted, but after he kisses her, she feels herself turning towards passion. She asks him to ask for nothing more but leave, taking his mystery with him. The Prince however, reveals his name, "Calàf, son of Timur" and places his life in Turandot's hand. She can now destroy him if she wants.

Turandot and Calàf approach the Emperor's throne. She declares that she knows the Prince's name: "It is ... love!" The crowd cheers and acclaims the two lovers.