Three of the river’s daughters, Woglinde, Wellgunde and Flosshilde, are playing and darting through deep waters of the Rhine. They are young, frivolous and very flirtatious. Their Father has entrusted them with safeguarding the Gold, but they are unaware of the importance of their mission. The dwarf Alberich, a deformed and lubricious Nibelung, hears their laughter but is thwarted in his attempt to join in their games and seduce them. One after another, the maidens avoid his advances fleeing swift as fishes and then mocking him. Once scorned, Alberich’s fury knows no bounds. Suddenly, the rising sun illuminates the glittering heap of the Gold and the ondines rashly reveal their secret to Alberich: «The world’s wealth belongs to him who from the Rhinegold fashions the Ring». They are confident that no risk exists because whoever decides to procure the Gold must abjure love. And who would be capable of doing that? However
Alberich furiously forswears love, wrests the Gold out of the rock and disappears. Night comes and the Rhinemaidens lament their loss.
Frica, the goddess of marriage, rouses her husband Wotan from his blissful slumber to announce that the newly terminated fortress of the gods soars lofty and solid. Wotan had confided its construction to the giants Fafner and Fasolt. Wotan is proud of this splendid abode, but Frick is afraid for her sister Freia. Wotan promised her as payment to the giants and the time has come to fulfil his promise. Wotan mollifies his wife by saying he never had the slightest intention of keeping the bargain. The giants arrive and claim their reward. Wotan refuses to hand Freia over, and the giants warn him of the consequences of breaking his pledge. Other gods appear, and Loge,
God of Fire, proposes a solution: the Rhinegold, that the gnome Alberich seized could perhaps serve to rescue Freia. The giants reluctantly accept the proposition, but declare that they will keep her as their hostage until they are given the Gold. In the meantime, the gods, deprived of the apples of youth that only Freia knows how to grow, begin to age. Loge and Wotan begin their descent to Nibelheim, the nether regions where Alberich is ruthlessly driving the Nibelungs to mine gold.
Thanks to the power of the Ring, Alberich has forced his brother Mime to fashion a helm which permits whoever wears it to change shape and become invisible. Mime covets the helmet but Alberich becomes invisible and clobbers his brother. Loge and Wotan appear but they find no one but Mime whimpering. They promise to free him and all the other Nibelungs from Alberich’s tyranny. When the gnome returns, Loge and Wotan exclaim that they have heard of the wonders the dwarf has been working but they don’t really believe it. Alberich puts the helmet on and is transformed into a dragon. Then Lodge slyly asks him if the helmet is capable of even more
difficult feats: his transformation into something tiny. Alberich becomes a toad, and Loge and Wotan tear off the helmet and drag him away as their prisoner.
Once out of the Nibelheim caverns, Wotan demands that Alberich turn over his hoard if he wants to go free. The dwarf orders the Nibelungs to haul up the gold and, although at first he resists forfeiting the helmet, he finally relinquishes it knowing that with the Ring he can fashion another. However Wotan wrests it from him. Alberich places a curse on the Ring: «As its Gold gave me limitless power now may its magic bring death to whoever wears it!». The giants reappear and, before handing Freia over, they demand that the pile of Gold reach the same height as that of the goddess. After the Gold has been heaped high, they complain that there is still a crack left through and insist that the Ring be added to close the crack. Wotan refuses and the giants threaten to break the contract. At this moment Erda, the earth goddess, appears and warns Wotan to yield up the Ring in order to prevent his doom. With the utmost reluctance, Wotan tosses the Ring to the giants. Fafner and Fasolt being immediately fighting over the old and the upshot is that Fafner kills his brother. When the murderer flees, the gods make preparations to enter their magnificent new fortress. Donner uses lightening to dispel the fog and a rainbow bridge is spanned. Wotan announces that the new abode will forever be called Valhalla. To the accompaniment of the wailing of the Rhinemaidens, the gods and goddesses enter Valhalla, although Loge expresses his fears: «They hasten to their end,
though they believe themselves strong».