Strephon, an Arcadian shepherd, wants to marry Phyllis, a Ward of Chancery. Phyllis does not know that Strephon is half fairy (his upper half — his legs are mortal!) and when she sees Strephon kissing a seemingly young woman, she assumes the worst. But her "rival" turns out to be none other than Strephon's own mother, Iolanthe, a fairy — fairies never grow old.

But Phyllis' guardian, the Lord Chancellor, and half the peers in the House of Lords are sighing after her. Soon the peers and the fairies are virtually at war, and long friendships are nearly torn asunder. But all is happily sorted out, thanks to the "subtleties of the legal mind".

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