Ann (Hepburn) is the crown princess of an unspecified country. She is on a widely publicized tour of several European capitals. In Rome, she becomes frustrated by her tightly scheduled life. Her doctor gives her a sedative to calm her down and help her sleep, but she secretly leaves her country’s embassy to experience Rome on her own.
The sedative eventually makes her falls asleep on a bench, where Joe Bradley (Peck), an expatriate American reporter working for the Rome Daily American, finds her. Not recognizing her, he offers her money so that she can take a taxi home, but a very woozy “Anya Smith” (as she later calls herself) refuses to cooperate. Joe finally decides, for safety’s sake, to let her spend the night in his apartment. He is amused by her regal manner, but less so when she appropriates his bed. He transfers her to a couch. The next morning, Joe, having already slept through the interview Princess Ann was scheduled to give, hurries off to work, leaving her still asleep.
When his editor, Mr. Hennessy (Hartley Power), asks why he is late, Joe lies, claiming to have attended the press conference for the princess. Joe makes up details of the alleged interview until Hennessy informs him that the event had been canceled because the princess had suddenly “fallen ill”. Joe sees a picture of her and realizes who is in his apartment. Joe immediately sees the opportunity and proposes getting an exclusive interview for the newspaper for $5000. Hennessy agrees to the deal, but bets Joe $500 that he will not succeed.
Joe hurries home and, hiding the fact that he is a reporter, offers to show Anya around Rome. He also surreptitiously calls his photographer friend, Irving Radovich (Eddie Albert), to tag along to secretly take pictures. However, Anya declines Joe’s offer and leaves.
Joe pretends to have lost a hand to the Mouth of Truth.
Enjoying her freedom, on a whim, Anya gets her hair cut short in a barbershop. Joe follows and “accidentally” meets her on the Spanish Steps. This time, he convinces her to spend the day with him. They see the sights, including the “Mouth of Truth”, a face carved in marble which is said to bite off the hands of liars. When Joe pulls his hand out of the mouth, it appears to be missing, causing Anya to scream. He then pops his hand out of his sleeve and laughs. (Hepburn’s shriek was not acting—Peck decided to pull a gag he had once seen Red Skelton do, and did not tell his co-star beforehand.)
Later, Anya shares with Joe her dream of living a normal life without her crushing responsibilities. That night, at a dance on a boat, government agents finally track her down and try to escort her away, but a wild melee breaks out and Joe and Anya escape. Through all this, they gradually fall in love, but Anya realizes that a relationship is impossible. She finally bids farewell to Joe and returns to the embassy.
Joe and Anya on a scooter ride through Rome—a ride that ends at the police station.
During the course of the day, Hennessy learns that the princess is missing, not ill as claimed. He suspects that Joe knows where she is and tries to get him to admit it, but Joe claims to know nothing about it. Joe decides not to write the story. Irving plans to sell his photographs, but then reluctantly decides not to do so out of friendship.
The next day, Princess Ann appears to answer questions from the press, and is alarmed to find Joe and Irving there. Irving takes her picture with the same miniature cigarette lighter/camera he had used the previous day. He then presents her with the photographs he had taken, discreetly tucked in an envelope, as a memento of her adventure. Joe lets her know, by allusion, that her secret is safe with them. She, in turn, works into her bland statements a coded message of love and gratitude to Joe. She then departs, leaving Joe to linger for a while, contemplating what might have been.