Arcadia is a peaceful and quiet province of Greece and it is ruled by Duke Basilius, who is powerful yet rules his subjects very well and with their best interests at heart. Because of this they are faithful subjects and it is a province where there is no trouble to speak of. Basilius is uncontrollably curious about his family's future and wants to know what life has in store for them. He consults the Oracle at Delphos who has some very disturbing predictions; he tells the Duke that his eldest daughter, Pamela, will be stolen from him, and that his younger daughter, Philoclea, will become involved in an unsuitable love affair. His beloved wife Gynecia will become adulterous. Perplexed, Basilius confides in his friend Philanax and tells him about the prophecy. Phalanx has been left in charge of Arcadia as Basilius has taken his wife and daughters to a secluded part of the country to try to escape the prophecy. Basilius and Gynecia live in one lodge and his daughters live in the second under the watchful eye of a simple shepherd named Dametas, who is very honest.
Shortly after the start of his leave of absence, two young princes, Musidorous and Pyrocles, arrive in Arcadia, swept ashore at Lydia after being in a shipwreck. They are courageous and handsome, filled with integrity, and their adventures have been many. Pyrocles sees a picture of Philoclea and declares himself to be in love with her. He is determined to meet her face to face and so disguises himself as a chivalrous Amazon and intends to approach her like this, disguised as a heroic woman. He takes the name of his lost lady Zelmane. Musidorous tries in vain to convince his friend that love is mere folly and travels with Pyrocles to the place where the princess lives in her leave of absence. Musidorous waits for him in a wood nearby; "Zelmane" sings a melancholy song that awakens Dametas, who quickly goes to the Duke's lodge to tell him of the strange woman who has appeared. Basilius sees Pyrocles in his Amazonian disguise and promptly falls in love. With his real identity still a secret, Pyrocles is introduced to the Duke's family and asked to stay. A young shepherd subsequently appears, a disguised Musidorous who has himself fallen in love with Pamela on sight. As Dorus the shepherd he is taken on as a servant after telling a fictional tale of having been sent by a friend to serve Dametas.
"Zelmane" saves Philoclea from attack by a lion but in doing so is discovered to be a man by Gynecia who falls in love with him. "Dorus" meanwhile saves Pamela from a bear. The disguised princes achieve their aim as both princesses become highly enamored of them. As is the custom in Arcadia, the shepherds meet up and sing poetic songs as their own entertainment and also to entertain the Duke and his guests. Often their song is accompanied by dance. The songs are about the Gods, and about human love and passions. The new relationships are all intensified by this and everything becomes more tangled. Both Gynecia and Basilius declare their love for Zelmane and Philoclea is confused by the passion she feels for a man she has just met.