In the village square, preparations are under way for the wedding of Elvino and Amina, a village favorite. Only Lisa, the practical-minded innkeeper, who was once engaged to Elvino herself, is unhappy. Amina enters and expresses her happiness and gratitude to all and especially to Teresa, who brought her up after she was orphaned (“Come per me sereno”). Elvino rushes in late for the contract signing and offers a bouquet of violets to Amina in apology, then gives her a ring that belonged to his mother (Duet: “Prendi, l’anel ti dono”). Suddenly, a stranger arrives—Count Rodolfo in disguise. After accepting Lisa’s offer to spend the night at the inn he declares his love for this place that he has not seen in years (“Vi ravviso, o luoghi ameni”). Noticing Amina, he is struck by her resemblance to a great love of his youth. As it grows dark, the villagers become apprehensive and Teresa explains to the stranger that a ghost haunts the town. Amused, the stranger says he’d like to see the ghost, then departs, followed by the villagers. Alone, Elvino and Amina quarrel over the count’s attentions to Amina, but Elvino soon apologizes for his jealousy (Duet: “Son geloso del zeffiro errante”).
At the inn, Lisa has identified the stranger as the lost heir of the former local count. The two of them flirt, when suddenly there is a noise and Lisa hides in the closet, dropping her handkerchief. Amina enters, walking in her sleep. Rodolfo realizes that she must be the village “ghost.” Lisa, however, assumes Amina is coming to meet Rodolfo as a lover and slips away. Moved by her unconscious expressions of love for Elvino, Rodolfo leaves Amina innocently asleep on his bed. Unfortunately, the ever-inquisitive villagers choose this moment to come sneaking in to get another look at the stranger. Lisa appears with Elvino and Teresa, and everyone is shocked to find Amina in the count’s bed. Awakened by the commotion, the girl protests her innocence (“D’un pensiero e d’un accento”). For a moment, the entire village seems heartbroken over Amina’s betrayal, but soon rage sets in. In spite of Teresa’s pleas and Amina’s protestations, Elvino calls off the wedding and, with the rest of the village, turns on Amina (“Non più nozze”) In the ensuing chaos, Teresa picks up Lisa’s handkerchief.
Feeling repentant, the villagers walk through a wood to Count Rodolfo’s castle, to speak to him regarding Amina’s case. Amina and Teresa enter and overhear Elvino lamenting (“Tutto è sciolto”). When he sees Amina, he reproaches her again and takes his ring from her. The villagers return to say that Rodolfo has confirmed Amina’s innocence and is on his way, but Elvino refuses to see his “rival” and leaves in despair. Amina is led away by Teresa.
Elvino has decided to marry Lisa after all. He enters to lead her to church, but they are interrupted by the arrival of Rodolfo, who again proclaims Amina’s innocence, explaining to the incredulous crowd that she was only sleepwalking. Teresa appears, asking for quiet, since Amina has fallen asleep from exhaustion. She is shocked to see that Lisa is about to marry Elvino, who replies that Lisa was not found in another man’s room. When Teresa produces the handkerchief, Elvino realizes that Lisa has lied to him.
Suddenly Amina appears, sleepwalking at a great height along a treacherous ledge. Afraid of waking her, the villagers watch and pray for her as she slowly reaches safety. Still asleep, Amina mourns the loss of Elvino, remembering the flowers he gave her that have since faded, and searching for her lost ring (“Ah! non credea mirarti”). Convinced of her innocence and unable to watch her suffer any longer, Elvino puts the ring back on her finger. Waking, Amina’s embarrassment turns to joy when she realizes that her dream has come true.