A crowd is assembled before the Imperial Palace, near the gigantic walls of Peking
As the sun sets, a mandarin announces Princess Turandot's fatal decree: the princess will only marry the man who succeeds in answering the three riddles put before him; the punishment for failure is death. The prince of Persia, who has failed in the attempt, is to be beheaded at the rising of the moon. The people, in ghoulish anticipation of the spectacle, call out to the executioner and try to force their way into the palace. They are kept back by the guards.
In the crowd are Timur, the old deposed and exiled Tartar King and Liù, the gentle and faithful slave-girl who chose to accompany him in his wanderings. When the girl calls for help for the old man who has been pushed, a young man comes forward to offer his assistance. It is Prince Calaf, Timur's son, who is also a fugitive in exile. They recognize each other and are reunited. As the execution procession advances, they exchange stories and Timur tells of his escape and Liù's generous assistance. When Calaf gratefully asks her the reason for such a sacrifice, Liù shyly reveals her secret: one day the Prince had smiled at her and since that day her life had been devoted to him. In the meantime the executioner sharpens the blade for the beheading and the crowd impatiently awaits the rising of the moon. At last a pale silver light in the sky and the procession leads the Prince of Persia to the place of execution.
At the sight of such a young and good-looking prince, the crowd's thirst for blood turns to pity: it calls on Turandot to spare him. Calaf himself curses the Princess for her cruelty, but the moment she appears his indignation dies on his lips. In the moonlight the beautiful Turandot is a heavenly creature, and Calaf cannot help but rapturously express his wonder. With a mere gesture Turandot denies her pardon, and orders the execution to take place. The grim procession is resumed, and the crowd follows behind.
Calaf however is overwhelmed by Turandot's beauty and remains rooted to the spot. Timur and Liù, who also stayed behind with him, vainly warn him of the dangers of such an infatuation. Calaf, however, pays no heed and calls out Turandot's name, only to hear it eerily echoed in the Prince of Persia's last cry before the axe drops. Calaf hesitates for a moment, but then approaches the gong to announce his intention to be put to the test. The way, however, is barred by three grotesque figures (Ping, Pang and Pong, the Imperial ministers) who block his passage and attempt to dissuade him by describing the gruelling punishments reserved for those who fail. Calaf still does not yield.
Meanwhile Turandot's ladies-in-waiting appear and call for silence, as the Princess is sleeping. Ghostly voices - the shadows of lovers who had failed to solve the riddles - are then heard calling on Turandot, but they serve only to rekindle Calaf's passion. And neither the reappearance of the executioner brandishing the Prince of Persia's head, nor Timur's desperate appeal and Liù's tears are sufficient to distract him from his purpose. He entrusts his father to Liù, frees himself from the clutches of the ministers, who make a final effort at restraining him, and rushes up to the gong, striking three fatal blows and simultaneously calling out Turandot's name.
In a pavilion near the palace
Ping, Pang and Pong comment on the Unknown Prince's recent challenge and lament the number of executions they have to prepare as a result of Turandot's decree. They nostalgically think of their country homes and the peace and the tranquillity of better days. They prophesy, however, that a day will come in which a man will manage to overcome the trial and re-establish the peace in China. They intone a hymn to love triumphant, but are swiftly brought back to the harshness of reality by the hum of activity caused by the three gong strokes: they are summoned to attend the latest trial and what could be yet another execution.
The scene is the great palace courtyard with an imposing staircase leading up to the imperial throne.
It is night and the scene, illuminated by countless lanterns and adorned with banners, is filled with dignitaries and members of the populace. The emperor begs the Prince to desist from his rash challenge, but Calaf is obstinate. Turandot's decree is then announced and the Princess herself explains the reason for the cruel ordeal: one of her ancestresses had been defeated by a foreign prince and dragged into captivity, where she had died of grief and shame. Turandot had therefore vowed to take vengeance for this outrage by exacting punishment on any foreigner who might wish to marry her. She also calls on the Unknown Prince to desist. When Calaf again refuses, the Princess propounds the first of the three riddles; "what is born each night and dies each dawn?" to this - after an anxious moment - the Prince answers "Hope". The Wise men consult their documents and confirm his answer; the crowd murmurs in astonishment. Turandot descends the staircase halfway and propounds the second riddle. "What flickers red and warm like a flame, yet is not fire?" Calaf - dazed by Turandot's proximity - hesitates, while the Emperor, Timur, Liù and the crowd all provide encouragement. He eventually answers: "Blood". Again the Wise Men confirm his answer. The crowd is almost in delirium and Turandot is visibly agitated. She runs down the remaining steps and propounds the third riddle face to face with Calaf; "what is like ice but burns?". She delights in Calaf's difficulty and haughtily taunts the kneeling Calaf, but he soon triumphantly springs to his feet with the third answer: "Turandot". The crowd rejoices. Turandot, on the other hand, is greatly shaken: she returns to her father's side and begs him not to deliver her into the hands of the stranger; in vain, the Emperor cannot go back on his word. Calaf on the other hand, listens to her appeal and frees her from the pact, explaining that it is her love that he wants. He even magnanimously proposes her an enigma: if she should discover his name by dawn, he is prepared to die. Turandot nods in acceptance. The Emperor, overcome by such generosity, expresses his desire to welcome him as a son. As Calaf ascends the staircase the crowd acclaims him and bursts into an imperial hymn.
Calaf is seated on the steps of a pavilion leading to Turandot's apartments contemplating the palace gardens lying at his feet in the moonlight. Heralds are announcing an edict issued by Turandot that, under pain of death, no means must be spared to discover the name of the Unknown Prince before dawn. Calaf muses that he himself will reveal his name to the Princess when he has won her love. Sounds of lamenting reach the garden, for the populace fear death if the Prince's name is not revealed. Little by little a crowd, headed by the three ministers, fills the garden. They tell Calaf that their lives are in his hands: they offer him whatever he wishes (women, wishes, glory) with a safe conduct out of China. When Calaf remains adamant, the crowd becomes threatening. However, just as they are pulling out their daggers, Timur and Liù are dragged in. They had been seen at dusk in the Prince's company and are certain to know his name. They summon Turandot, who orders the old man to reveal the Prince's name. She is about to apply torture when Liù comes forward saying that she alone knows his name, but refuses to reveal it. The crowd once again become threatening and advances upon her. Calaf tries to defend her but he is held back by the guards. She reassures the Prince that she will not give away the secret. Ping interrogates her and her arms are twisted, but all in vain. Liù collapses and Turandot asks her in astonishment what gives her such strength. She replies that it is love that makes her willing to sacrifice her life for the Prince. After a moment 's hesitation, Turandot orders the torture to recommence and calls for the executioner. Liù first despairing tries to find an opening in the crowd, then runs up to Turandot: prophesying that the Princess will eventually succumb to the Prince's love, she declares her intention to sacrifice herself in order to help him gain that victory. With a rapid movement she snatches a dagger from a nearby guard and stabs herself: she falls dead at Calaf's feet. Turandot stares at her in astonishment, Calaf cries out in horror and Timur staggers feebly towards her dead body. Throughout the crowd the death of the innocent girl produces a wave of pity and superstition and foreboding. Liù is lifted up and carried in a procession to burial. Timur accompanies her and his laments are echoed by the crowd. The Prince and Turandot are left alone face to face. Calaf calls on her to desist from her ruthless frigidity and tears away the veil covering her face. His ardour is not calmed by her reproaches and he advances to embrace her. Turandot retreats in alarm, but he follows her, grasps her in his arms and kisses her. The first kiss makes the Princess humble and suppliant. She begs the prince to leave, but Calaf continues to hold her in his arms. Turandot is reduced to tears and ashamed to her surrender. She confesses that she has both loved and feared him from the very first moment, but she nevertheless asks him to leave her and not to claim a greater victory than the one he has already won. Calaf now puts her to the supreme test of love. He puts his life in her hands by revealing his name to Turandot. The unexpected disclosure rekindles the Princess' pride: believing that she could still come out victorious she summons Calaf before the Emperor and the crowd.
The huge staircase in the palace courtyard is once again in the scene for an assembly of the chief dignitaries and populace in the presence of the Emperor - this time for the final trial. Turandot announces to her father that she knows the name of the Unknown Prince. But when all expect her to make the fatal revelation that would sentence Calaf to death, she turns to him and overwhelmed by her newly found love exclaims: "His name is ...Love". The reply is echoed by Calaf as he rushes up the steps to embrace her. The crowd joyously acclaims the couple with a love hymn.