The curtain rises on Golux trying to sleep beside a hollow tree in the forest ("When It's Once upon a Time"). A little bird's chirping keeps Golux awake, and he pleads for it to stop so that he may sleep. He makes a deal with the bird: he will tell it a story and, in exchange, the bird will allow Golux to sleep. Golux begins his story of a cold Duke and his warm, beautiful niece, Princess Saralinda. Saralinda had many suitors, but the Duke gave them impossible tasks to perform in order to keep Saralinda and her warmth in his castle; the Duke and his castle were so cold that all thirteen of his clocks had frozen, making him think that he had, in fact, murdered time. Saralinda, a nearly 29-year-old woman, dreams of the day that she would find a prince and live in warmth ("I Dreamt").

In the town that lay below the castle, a Prince has arrived, disguising himself as a minstrel. He announces to the townspeople that he is Xingu, a wandering minstrel in search of Saralinda. They inform him that she is in the castle, but that the Duke has no intention of giving her away and will simply request an impossible task, then kill him. The Prince, however, is confident that he can charm both the Duke and the Princess ("Hark, Hark the Dogs Do Bark").

Golux then comes upon the Prince, explaining to him that he is the only Golux in the world, a creature that must be on hand when people are in peril. Despite his confusing way of constantly contradicting himself, the Prince decides to put his trust in Golux. Just then, the two hear footsteps and commands. Golux is sure that it is the Duke coming to kill the Prince. He assures the Prince that he will think of a plan, but when the men arrive and seize the Prince, Golux is gone.

The Prince is taken to the dungeon and once inside, he discovers that he is not alone. Golux is also there. He once again assures the Prince that he will think of something to help him get to Saralinda. Meanwhile, Saralinda wonders to herself if she will ever meet the man of her dreams ("Saralinda"). Moments later, a guard named Hark comes to take the Prince to meet the Duke. The Prince finds himself in a room with the Duke and Saralinda. He tries to speak to her, but the Duke informs him that he had a witch put a spell on her. The Prince is then introduced to the Duke's two spies: Hark, the guard, and Listen, a spy who is heard but never seen... and who appears to be obstinate at times. The Duke assigns the Prince a task to find a thousand jewels and bring them back to the castle. He also reveals that he knows that the Prince is not a minstrel. Since the Prince could easily retrieve the jewels from his kingdom, the Duke gives him a time limit of 99 hours. Additionally, when the Prince returns with the jewels, he must fix all of the Duke's clocks so that they chime five o'clock as he returns. Although he knows that this is an impossible task, the Prince agrees to the conditions. If he is able to complete it, he will get Saralinda's hand, and the Duke will be eaten by the Todal. If he fails, he will be fed to the Todal – a giant, horrifying blob ("The Todal Trio").

Later in the forest, the Prince is once again approached by Golux. Golux reveals that he is the Duke's invisible spy. He begins thinking of ways to obtain the jewels and suddenly remembers the story of an old woman, Hagga, who was given the gift to weep jewels by King Gwain ("The Story of Hagga"). The only problem is that she is now very old and can no longer weep. Desperate to try anything, the Prince and Golux set out to find Hagga, hoping that they can make her sad enough to weep one more time.

As the Prince and Golux start to feel lost, they run into a Jackadandy, who has just been to see Hagga. He shows them the right direction but warns them that he has just told her every sad story that he knows, and she still does not weep. With no other option, they continue on their journey to Hagga. When they arrive at Hagga's hut, they quickly get to work by attempting to make her weep. The Prince notices a chest in the corner and when he looks inside, he finds thousands of jewels. Hagga tells them that those are jewels that come from tears of laughter and those kind of jewels only last two weeks before turning back into tears. She tells them that it has been two weeks since she laughed out those jewels, and they turn to tears before their eyes. The two quickly try to make Hagga laugh again to produce jewels but they can only get her to chuckle, simply producing costume jewelry ("Golux Limerick"). Finally, Hagga recalls something in her past that causes her to laugh heartily, producing enough jewels to fulfill the Duke's task. The Prince and Golux take the jewels and hurry back to the castle ("Hurry, Hurry").

Back at the castle, the Duke waits with Hark for the Prince. He confesses to Hark that Saralinda isn't actually his niece, but instead a princess from whom he stole a castle as a young girl. He plans to marry her but due to a witch's spell, he cannot do so until Saralinda is 21, which happens to be the next day. The spell also dictated that any man who seeks her hand in marriage must be given the opportunity to do so, which is why the Duke has created impossible tasks for every suitor. He explains that the witch revealed that the only man who could save Saralinda was a prince whose name does and doesn't begin with X. Since the Duke knows of no prince with such a name, he assumes that he is safe.

Hark tells the Duke that the Prince was disguised at one time as the minstrel, Xingu, which would mean that the Prince has a name that did begin with X. Enraged that he has been duped, the Duke prepares to murder the Prince and Golux, marrying Saralinda immediately. As the Duke and Hark leave to assemble the guards, Golux sneaks into the room with Saralinda. He tells her that she has the power to start the clocks. She tries touching them, but they still will not start. Golux thinks and decides that she shouldn't touch the clocks, but move her hand a short distance away from them to get them started. As Saralinda moves her hand back, the clocks begin ticking and, all together, strike the hour of five.

The Duke and Hark enter after hearing the striking of the clocks. The Prince, Golux and the Princess stand before them, bearing the thousand jewels. They have completed the task. The Duke insists on counting each jewel and while doing so, reveals to the others that Saralinda isn't his niece. Suddenly, Hark tells them that he is actually a servant to the good King Gwain of Yarrow, and that Saralinda is King Gwain's daughter; he had followed the Duke when he stole Saralinda, but due to yet another witch's spell, could not save Saralinda himself. The Duke, angry at how his fate has turned out, sends them all away. He has lost and asks that they leave him with his jewels. However, not long after they leave, his jewels turn to water. The Duke calls for Hark, but is instead met by the Todal, which has come to devour him.

Hark and Golux bid goodbye to the Prince and Princess. They ask Hark to come with them, but he explains that the spell demands that he stay there for two more weeks, before he can return to Yarrow. The Prince and Saralinda set off on a ship to Yarrow to reunite her with her family. Then the two can finally be wed ("In the Land of Ever After").

Back in the forest, by the hollow tree, Golux finishes his story for the little bird. He has met his part of the deal, but the bird continues to chirp. Golux finally realizes that he has actually been obstructing the bird's path to its nest this entire time. He puts the bird to bed, and bids the forest goodnight.