Scene one – On the bed of the Rhine River
Three Rhinemaidens, Woglinde, Wellgunde and Flosshilde, swim in the Rhine, guarding their gold, while Alberich admires from above. They tease and mock him, and repel his flirtations. He angrily spouts his revenge. His eye catches the Rheingold, and the maidens relay its magical powers – if fashioned into a ring, it would give its wearer power over the world if he would renounce love. Alberich boldly manages to steal the gold, to the Rhinemaidens’ protestations.
Scene two – an open space on a mountain; a castle glimmers in the distance
Wotan marvels at the newly completed Valhalla, future home of the Norse gods. His wife, Fricka, urgently reminds them that the price for the giants Fasolt and Fafner to build the magnificent palace is her sister Freia, goddess of love and beauty. She tends the ever-so-crucial golden apple tree, whose fruit ensures the gods eternal youth. Freia also pleads for her fate, but Wotan is confident that the guile of an ever-slick and slithery Loge, god of fire, will solve her plight.
Fasolt and Fafner arrive to claim their prize. Wotan is unsuccessful in breaking their agreement, and when they attempt to take possession of Freia, Froh (the god of joy) and Donner (god of thunder) intercede. Loge arrives belatedly, and tempts the giants with thoughts of obtaining the Nibelung gold. As the brothers discuss the matter, Wotan confers with Loge – he must be the one to possess the mythical gold and its power, and Loge had promised to get them out of the bargain. They all will be slaves to Alberich if it is not confiscated. Fasolt and Fafner agree they will release Freia from the bargain if Wotan can get them the Rheingold – however, she will be held as a hostage until he does.
Scene three – The subterranean caverns of the Nibelheim
Alberich taunts his brother Mime for the Tarnhelm, a magic helmet that renders its wearer invisible. Loge and Wotan enter his underground chasm and learn that Alberich has become a tyrant over the professional miners, the Nibelungs, as a result of the power of the ring. Relying on their past association, Loge does his best to con Alberich out of the ring, stating that it will not be safe as he sleeps – his slaves may rebel. Alberich is confident the Tarnhelm will protect him as it also has the power to make him any shape and size. Loge asks for a demonstration. The over-confident dwarf first morphs into a large dragon and then a small toad, at which point Loge seizes the helmet. Alberich returns to his normal guise and is taken prisoner.
Scene four – an open space on a mountain
In exchange for Alberich’s freedom, Wotan demands all of his gold, including the ring on his finger. Alberich commands all the Nibelungs to gather the hoard and puts a curse on the all-powerful ring – it will bring misery and death to those who possess it. Fasolt and Fafner return with Freia and insist the gold, including the Tarnhelm, be piled high enough to obscure her beauty and make the parting easier. They demand the ring as well, but Wotan refuses. Erda, the goddess of the earth, rises and renders motherly advice – turn the ring over to them and avoid eternal doom and wretchedness. Her three daughters, the Norns, weave the future and already know what will occur. The other gods beg Wotan to give up the ring and reluctantly he concedes.
The brothers then brawl over who shall keep the ring, and Fasolt is killed. Loge eulogizes about the temptation and evil power of the ring – they would be better off without it. The gods then turn to admire their gleaming new Valhalla and cross the rainbow bridge over the river to its entrance. The Rhinemaidens lament the loss of their gold.