Act I.
Orsino, The Duke of Illyria reveals his great love for the rich Countess Olivia who we learn has decided to veil herself for seven years to honor her recently deceased brother's memory. Profoundly impressed by this, the Duke continues his pursuit of Olivia undeterred...
Viola is introduced to us as a survivor of a shipwreck. Her brother was lost at sea but may not be dead. Viola learns from the Sea Captain of their doomed ship that they are now in Illyria, which is ruled by Orsino. The Sea Captain explains to Viola that The Duke of Illyria is pursuing the fair Olivia, a woman who like Viola has lost a brother.
Identifying with Olivia's grief, Viola wishes to serve Olivia but when she learns this will be impossible, Viola instead has the Sea Captain disguise her as a boy so she can serve Orsino, The Duke of Illyria.
Sir Toby, Olivia's cousin is introduced. We quickly discover that he drinks a great deal, keeps late hours and is generally rowdy by nature. Maria, Lady Olivia's maid makes this clear to us in her unsuccessful attempts to quieten Sir Toby down. Maria also reveals Olivia's annoyance that Sir Toby has encouraged Sir Andrew Aguecheek to court her.
Sir Andrew Aguecheek is now introduced, quickly revealing himself to be rich but rather dim (unintelligent). Sir Toby has manipulated Sir Andrew into pursuing Olivia so Sir Toby can continue benefiting from Sir Andrew's great wealth.
Realizing Olivia will not be courted by him, Sir Andrew makes preparations to leave but Sir Toby convinces Sir Andrew to stay a month longer, no doubt so Sir Toby can use Sir Andrew and his great wealth further...
Viola has successfully disguised herself as a man named Cesario. Her success with Orsino has been so great that she is now a favorite with Orsino who believes Viola to be the man named Cesario. As such, Orsino entrusts Cesario (Viola) to express his love for Olivia. Cesario, (Viola) deeply divided by her own love for Orsino, nonetheless dutifully represents Orsino.
Olivia's maid is angry with Feste, Olivia's Clown. Feste redeems himself with Lady Olivia by telling her she should not mourn her brother since he is in a better place, namely heaven. Olivia is pleased, but Olivia's uptight steward, Malvolio is not, regarding Feste as old and lacking in wit.
Olivia gives us an insight into Malvolio's character by saying that he suffers from self-love or is arrogant and vain.
Cesario (Viola) petitions Lady Olivia, eventually gaining her audience. Olivia is quite taken by Cesario but tells him, she cannot return Orsino's affections for her.
Olivia would however like to see Cesario (Viola) again, asking him to come back to report to her how Orsino took the news.
Intrigued by Cesario, Olivia sends Malvolio after him to give back a ring Cesario left behind as an excuse to express her affection for him...
Act II.
Sebastian, the twin brother Viola feared had died at sea, has also survived the shipwreck. Like Viola he mourns the loss of his sibling, believing his sister Viola to be dead.
Antonio, the man who saved Sebastian's life is touched by Sebastian's loss and decides to follow Sebastian to the Duke of Orsino's court even though he has many enemies there. Sebastian nobly tries to talk Antonio out of this, but Antonio is eventually accepted by Sebastian to travel with him to the Duke's court.
Malvolio catches up with Cesario (Viola), rudely returning Cesario's ring to him. Cesario is confused, he left no such ring at Lady Olivia's house. Malvolio also conveys Olivia's desire that Cesario return to confirm that Orsino has accepted the fact that she does not love him.