The play opens at the Illyrian court, where the love-sick Duke Orsino enjoys some live tunes while fantasizing about the luscious Countess Olivia. Too bad Olivia can't be bothered with the Duke or any other living man. Valentine reports that Olivia's brother has recently died (shortly after her old passed away), so Olivia's decided to lock herself up at home while she mourns for the next seven years. Olivia's grief over her dead bro doesn't bother Orsino one bit. In fact, he tells us that, if Olivia can love a dead sibling this much, just imagine what she'll be like with a living, breathing man.
Meanwhile, Viola and a crew of sailors wash up on the Illyrian shore after their ship sinks, separating Viola from her twin brother Sebastian, who may have drowned. Viola doesn't quite know what to do next. So, she decides, what the heck? Why not dress up like a boy and get a job as one of Duke Orsino's servants? The sea captain is happy to help her transform from Viola to "Cesario," a young "boy" with a great singing voice, luscious lips, and a can-do attitude.
Over at Olivia's pad (where everyone is supposed to be sad since the lady of the house is mourning her dead brother), Olivia's free-loading uncle, Sir Toby Belch, and his drinking buddy, Sir Andrew Aguecheek, party like it's 1599. Olivia's trusty lady in waiting, Maria, gives Toby and Andrew a piece of her mind – they ought to be ashamed of themselves, carousing around at all hours before stumbling home drunk and noisy when Olivia is trying to focus on her love for her dead brother. Aguecheek reveals that he's hoping to get lucky with Olivia, who is, after all, a smokin' hot, single heiress. Even though it's pretty clear that Olivia's not into Aguecheek, her greedy uncle Toby convinces him to stick around and take another run at the Countess. If Aguecheek marries Olivia, Toby can mooch off his drinking buddy and party like a rock star for ever and ever without having to worry that Olivia will kick his sorry self to the curb.
Before we know it, Viola (as "Cesario") has a job at the Duke's court and has become Orsino's favorite page. "Cesario" and the Duke have become quite cozy ever since the Duke decided to share all his intimate thoughts with "Cesario" – we're talking secret diary kinds of things. "Cesario's" first task as Orsino's best boy is to march on over to Olivia's house and convince the Countess that the Duke is a really swell guy – if Olivia knows what's good for her, she'll ditch the black mourning veil and get ready for some romance, Orsino-style.
Viola (disguised as "Cesario") confesses to the audience that she is totally into Duke Orsino. Uh-oh. Now Viola has to convince some other girl, Olivia, that Orsino's a great guy when she, Viola, wants the Duke all to herself. This is getting really juicy.
Over at Olivia's pad, Feste the "licensed Fool" (he's literally licensed to say whatever he wants) entertains Olivia and Maria with his witty word play and clever insults. Malvolio, Olivia's snobby Steward (head servant), bags on Feste and tries to convince Olivia to get rid of him. Olivia tells Malvolio to zip it – he's the fool if he can't appreciate the brilliance of Feste's clowning.
When "Cesario" is granted access to Olivia's pad and tries to deliver the Duke's gooey love message, Olivia doesn't cooperate – the Duke's an OK guy and all, but Olivia's just not into him. Plus, she's super busy wearing her black veil and thinking about her brother. "Cesario," however, keeps talking and, before we know it, Olivia is all interested in Duke Orsino's "boy" servant. When "Cesario" leaves, Olivia admits she's totally crushing on "him." (Olivia has no idea "Cesario" is a girl wearing a disguise.) So, Olivia fibs to Malvolio and says that "Cesario" left behind a ring – Malvolio should return the ring and invite the luscious boy back to Olivia's pad so they can continue their discussion about how she will never love Duke Orsino.
Meanwhile, on a sea coast near Illyria, Viola's twin brother Sebastian (turns out he's alive after all – hooray!) attempts to extract himself from the company of Antonio, a clingy sea captain who fished Sebastian out of the ocean and saved his life. Sebastian's not in the mood to hang out with Antonio any more – he's bummed because he thinks his sister is dead and says he's headed to Duke Orsino's court, without Antonio (who doesn't seem to get the hint).
Back in Illyria, Malvolio catches up with "Cesario" and "returns" Olivia's ring. Viola plays it cool with Malvolio but she's no dummy – she realizes that poor Olivia is in love with "Cesario," which makes Viola feel really bad about all the trouble her "wicked" disguise is causing. Viola calls herself a "monster," but doesn't reveal her true identity.
Later that night, Sir Toby Belch, Sir Andrew Aguecheek, and Feste get rowdy over at Olivia's pad – singing songs and drinking way too much. Malvolio the party-pooper comes in and wags his finger at the rowdy crew. He also criticizes Maria for failing to keep Toby in check.
We interrupt this program for a history snack: Malvolio is compared to a Puritan. Elizabethan Puritans were a radical Protestant sect known for their beef with the Catholic Church and harsh criticisms of the theater, festivals like Twelfth Night, and just about every other form of entertainment. Malvolio is compared to a "Puritan" in the play because he disapproves of everything – Feste's clowning, Toby's partying, etc.
Maria is totally fed up with Malvolio, so she hatches an evil genius plan to punish Malvolio for being so judgmental. The scheme: Maria will forge a love letter and drop it where Malvolio can find it. Malvolio will think that Olivia wrote the letter to him and will make a complete fool out of himself trying to impress Olivia. (By wearing a crazy outfit, being rude to everyone, and smiling constantly.)
Later, over at Orsino's place, the Duke and "Cesario" talk about love. "Cesario" admits "he" is in love, but doesn't reveal the object of "his" desire (Duke Orsino). Orsino doesn't appear to recognize that "Cesario" is talking about him. (At least he doesn't let on.)
Hiding behind a tree in Olivia's garden, Toby, Aguecheek, and Fabian overhear Malvolio fantasizing about hooking up with Olivia (a ludicrous idea since Malvolio is a high-level servant, but a servant nonetheless). When Malvolio finds the forged letter on the ground, he convinces himself that Olivia is madly in love with him and wants him to dress in a crazy costume, be rude to her family and the other servants, and plaster a silly grin to his face even though Olivia is in a sad mood.
"Cesario" returns to Olivia's pad to deliver a love trinket from Orsino. Olivia fesses up that she's totally hot for "Cesario," even though "he" says he's not interested. Sir Andrew Aguecheek is upset about this and says he's going home, but Toby and Fabian convince him that Olivia is just trying to make him jealous – she really wants Aguecheek to pick a fight with "Cesario" to prove that he loves her. The not-so-bright Aguecheek agrees to write a letter to "Cesario," challenging him to a duel.
Meanwhile, Sebastian has arrived in Illyria and Antonio has followed him like a puppy. Antonio reveals that, if he gets caught in Illyria, he's in deep dog-doo, because he's a pirate who stole from Duke Orsino. Antonio decides to hide out at the motel, but gives Sebastian some money so his friend can go sight-seeing and buy himself something pretty.
Back at Olivia's pad, the Countess encounters Malvolio, who is wearing yellow stockings (Olivia hates yellow stockings) and being snobby with Olivia's people. He also slobbers all over Olivia's hand, grins like a loon, and quotes from the forged letter. Olivia, who has no idea about Maria and Toby's prank, thinks Malvolio is crazy and runs off to find "Cesario." When Olivia catches up with her favorite "boy," she tries once again to seduce "him." "Cesario" says "he" isn't into older women, or any other women for that matter. Olivia acknowledges that Cesario is a little too young for her and says she'll back off.
Soon after, Toby Belch tricks Sir Andrew Aguecheek and "Cesario" into drawing their swords and preparing for a duel, but neither Aguecheek nor "Cesario" want to fight. "Cesario" cracks a joke about not having a penis, but nobody knows what "he" is talking about. Antonio shows up and thinks that "Cesario" is Sebastian. (Remember, Viola and Sebastian are fraternal twins. Apparently, Viola looks just like her bro when she's dressed like a boy.) Antonio threatens to beat up Aguecheek, but, just then, the cops show up and arrest Antonio for being a pirate. Thinking "Cesario" is Sebastian, Antonio asks "him" to return the spending money he gave "him" earlier. "Cesario" has no idea what Antonio is talking about, but, being a nice person, gives Antonio some spare change anyway. Antonio thinks he's been used by his beloved Sebastian.
Now that Sebastian is on the scene in Illyria, everyone mistakes him for "Cesario," including Olivia, Toby, and Aguecheek. Aguecheek slaps Sebastian, thinking he is the wimpy "Cesario." But, Sebastian's not a wimp and is about to pummel both Toby and Aguecheek when Olivia runs out and breaks up the fight. Olivia fawns over Sebastian, who is stoked to be getting so much attention from the rich, beautiful Countess – he wonders if he's dreaming or has gone batty. Olivia proposes (thinking Sebastian is "Cesario") and Sebastian jumps at the chance.
Inside Olivia's house, Malvolio has been locked up in a dark room and is treated like a madman/victim of demonic possession. Feste, disguised as a clergyman, holds a mock-exorcism while Malvolio begs for help. Feste finally agrees to let Malvolio write a letter to Olivia. Meanwhile, Olivia drags a real clergyman into her garden and tells Sebastian (who she still thinks is "Cesario") she's a jealous woman – they better get married ASAP. Sebastian is happy to oblige.
Later on, Duke Orsino and "Cesario" hang out in front of Olivia's house. When the cops walk by with Antonio, Antonio sees "Cesario" and flips out, ranting and raving about how Sebastian did him wrong. (Antonio still mistakes "Cesario" for Sebastian.) Then, Olivia shows up and yells at "Cesario" because she thinks her new husband is already neglecting her. She accuses "Cesario" of being a bad husband. Then Aguecheek and Toby Belch run out and say that "Cesario" beat them up. Poor Viola (as "Cesario") is in quite a jam, until Sebastian shows up and everyone realizes that Sebastian is the one who married Olivia and beat up Aguecheek and Toby. Sebastian says he's sorry for beating down Olivia's uncle, but he would most definitely do it again if given the chance.
Then Viola admits that she's not really "Cesario" – she's Sebastian's un-dead sister. Orsino proposes to Viola, but still calls her "boy" and reminds Viola of all the times "Cesario" confessed "his" love to him. Malvolio interrupts when he comes out and yells at Olivia for writing a letter and making him believe that she wanted him to act like an idiot to prove his love for her. Olivia denies writing the letter and explains that Maria must have forged the note to trick Malvolio. Malvolio swears revenge and runs away.
Orsino says that he's going to marry Viola, just as soon as she changes out of her boy clothes. (She can't yet because the sea captain has her dress and Malvolio is holding the captain prisoner.) Oh well, until Viola can get her clothes back, Orsino says she will just have to "be" "Cesario." In the meantime, they should all party inside Olivia's house. Feste is left on stage to sing a song to the audience.