Place: A barge on the Seine in Paris.
It is close to sundown in Paris, and the stevedores work unloading Michele's barge. Giorgetta, Michele's wife, asks her husband if she can bring wine to the workers. He agrees but does not join them because she refuses his kiss. The stevedores start dancing to the music of a nearby organ grinder and one of them steps on Giorgetta's foot. Luigi, a stevedore, dances with her, and it is evident that there is something between them. Upon hearing of Michele's return the stevedores' gathering breaks up.
Work is getting scarce and Giorgetta and Michele discuss which of the stevedores should be dismissed; she prefers that it be anyone other than Luigi despite this being Michele's first choice. Soon the conversation turns into a fight. La Frugola enters, looking for Talpa, one of the stevedores and her husband. She shows everyone the fruits of her scavenging in Paris and scolds the men for their drinking. Luigi laments his lot in life, and La Frugola sings of her wish to one day buy a house in the country that she and her husband can retire to. Giorgetta and Luigi sing a duet remembering the town they were both born in.
The stevedores depart except for Luigi who asks Michele to dismiss him and that he be allowed to disembark in Rouen, but Michele convinces him against this notion. When alone, Giorgetta asks Luigi why he requested to be dismissed and they acknowledge their mutual love. They plan to meet later that evening upon the signal of a match being lit on-board. By now Luigi seems very determined to kill Michele and flee with Giorgetta.
Michele reminisces with Giorgetta of the days before their child died and how all three would fit under his cloak. He is distressed about the fact that he is twice her age; she comforts him but she will still not kiss him. Michele wonders if his wife is still faithful to him and ponders who might have changed her so much.
He reviews for himself the list of all the men that have shared in their lives but dismisses all of them as improbable.
Michele then lights his pipe and Luigi, seeing it from afar, thinks that it is Giorgetta's signal. He returns to the barge only to be confronted by Michele. In the ensuing fight Michele gets the upper hand and forces Luigi to confess his affair before killing him and hiding the body under his cloak. Giorgetta returns to the barge, feigning remorse, and Michele opens wide the cloak to reveal her dead lover.