In Barataria, the gondolier-courtiers are all enjoying living under "a monarchy that's tempered with Republican equality".
 Marco and Giuseppe have been doing all the work around the palace for the past three months - it is the privilege of royalty!
 They are happy enough with this arrangement, except that they are worried about having to share a single portion of rations between the two of them, and they miss their wives.
 Soon, however, all the ladies arrive, having risked the long sea voyage from Venice – they could no longer stand the separation.
In delight, the reunited couples have a magnificent banquet and a dance (a cachucha).

The Grand Inquisitor arrives at the ball to find that the Republican gondoliers have promoted everyone to the nobility.
 He explains that there must be a distinction between commoners and those of rank, warning that "when everyone is somebody, then no-one's anybody".
He then breaks the news that one of the gondoliers had married Casilda when a baby and therefore is an unintentional bigamist.
The gondoliers attempt to console their wives, who are distraught to discover that neither one will be queen, and that one married someone who is already married.

The Duke and Duchess of Plaza Toro soon arrive with the beautiful Casilda.
 They are now dressed in style, and the Duke explains how he was applied for by the public under the Limited Liability Company Act, and how they now earn a very good living.
 Appalled, however, at the lack of pomp and ceremony with which they were received, he attempts to educate the two monarchs in proper royal behaviour.
After a lesson in etiquette, the two Palmieri brothers are left alone with Casilda.
She agrees to be an obedient wife, but warns them that she is "over head and ears in love with someone else."
Seizing this opportunity, the two men introduce their wives.
The three ladies and two men sing a quintet about their unprecedented predicament.

Don Alhambra brings in the nurse who had tended the infant prince of Barataria twenty years ago.
She reveals that when the Grand Inquisitor came to steal the prince, she had loyally hidden him away, and given Don Alhambra her own young son instead.
Thus, the king is neither Marco nor Giuseppe, but her own son, Luiz.
This resolves the romantic entanglements to everyone's satisfaction.
Casilda finds that she is already married to the man she loves, Luiz.
The two gondoliers surrender their crown to Luiz and, though a bit disappointed that neither will be a king, they can return happily to Venice with their wives.
There is a final dance for the full company, reprising the gondoliers' Act I duet and the cachucha.
In Barataria, the gondolier-courtiers are all enjoying living under "a monarchy that's tempered with Republican equality".  Marco and Giuseppe have been doing all the work around the palace for the past three months - it is the privilege of royalty!  They are happy enough with this arrangement, except that they are worried about having to share a single portion of rations between the two of them, and they miss their wives.  Soon, however, all the ladies arrive, having risked the long sea voyage from Venice – they could no longer stand the separation. In delight, the reunited couples have a magnificent banquet and a dance (a cachucha).
The Grand Inquisitor arrives at the ball to find that the Republican gondoliers have promoted everyone to the nobility.  He explains that there must be a distinction between commoners and those of rank, warning that "when everyone is somebody, then no-one's anybody". He then breaks the news that one of the gondoliers had married Casilda when a baby and therefore is an unintentional bigamist. The gondoliers attempt to console their wives, who are distraught to discover that neither one will be queen, and that one married someone who is already married.
The Duke and Duchess of Plaza Toro soon arrive with the beautiful Casilda.  They are now dressed in style, and the Duke explains how he was applied for by the public under the Limited Liability Company Act, and how they now earn a very good living.  Appalled, however, at the lack of pomp and ceremony with which they were received, he attempts to educate the two monarchs in proper royal behaviour. After a lesson in etiquette, the two Palmieri brothers are left alone with Casilda. She agrees to be an obedient wife, but warns them that she is "over head and ears in love with someone else." Seizing this opportunity, the two men introduce their wives. The three ladies and two men sing a quintet about their unprecedented predicament.
Don Alhambra brings in the nurse who had tended the infant prince of Barataria twenty years ago. She reveals that when the Grand Inquisitor came to steal the prince, she had loyally hidden him away, and given Don Alhambra her own young son instead. Thus, the king is neither Marco nor Giuseppe, but her own son, Luiz. This resolves the romantic entanglements to everyone's satisfaction. Casilda finds that she is already married to the man she loves, Luiz. The two gondoliers surrender their crown to Luiz and, though a bit disappointed that neither will be a king, they can return happily to Venice with their wives. There is a final dance for the full company, reprising the gondoliers' Act I duet and the cachucha.
The Gondoliers