London, 1912. In Covent Garden market Eliza Doolittle, a young coarse flower seller, protests loudly after a dapper young man, who carelessly upset her flowers, then she tries to talk Colonel Pickering into buying some flowers. All the time Professor Henry Higgins, a prized phonetician, is painstakingly taking notes about her way of speech. Liza at first suspects he is a policeman, but Higgins manages to convince her otherwise. By her dialect he can recognize the place of her origin, since, he says, he can place any Englishman within six miles of his home by the quality of his speech and complains about the fact that Englishpeople are unable to speak their ouwn language correctly.

Eliza's dream is to run her own flower shop and she asks Prof. Higgins to teach her to speak a good English and to polish her manners. Spurred on by a wager with Colonel Pickering, Higgins agrees. Eliza comes to live in Higgins' house. Her father gets suspicious and tries to blackmail the professor, but Higgins convinces him that he has no interest in Liza but for professional meanings. He actually is a confirmed bachelor, who never allows himself to get involved with a woman. At long last Liza responds to Higgins' instruction and manages to drop her cockney accent, much to the delight of Higgins and Pickering, who proceed to express their joy in an uninhibited fandango.

Higgins brings her to Ascot and to an Embassy ball, where Liza, elegantly attired, behaves as grand lady and wins Higgins' mother approval and young Freddie Eynsford-Hill heart. At the Embassy, Liza has her greatest success, passing the all the aristocratic people's hard scrutiny, without being discovered. They, indeed, mastake her for an Hungarian princess. Eliza is delighted, but, after a while, she begins to wonder what will become of her, now that she no longer is the simple girl she used to be. Higgins suggests that she marry a nice young man and she gets angry at him. Packing her things, she storms out of Higgins' house to stumble outside into Freddy. He protests that he is in love with her, but Liza is skeptical and brushes him off. In an attempt to find her true identity, she returns to the flower market outside Covent Garden, but nobody regnizes her, not even her own father. When he does, he gives her the cheerful news that he is about to get married, because his long time lifemate also wants to be treated as a lady.

Higgins is uspet. He can't understand why Liza did leave him. He meets her again at his mother's place, where Lize came to pay the old lady a visit. He would like her to come back to him, but Liza informs him that Freddy has asked to marry her. Higgins loses his temper and calls her a fool. Liza retorts that she can marry anybody she wishes and that she can get along in life very well without him. At his home, at dusk, Higgins recalls Liza and realizes how much she has come to mean to him. Without her, he is lost and lonely. Liza slips silently in as he is thus musing. When he finally notices her he barks: "Liza! Where the devil are my slippers?!"