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During the Seven Years' War, Prussian Major von Tellheim sacrifices his own fortune to save a Saxon estate from being plundered. After the war ends he is discharged and left penniless when the government suspects his noble deed was actually due to a bribe. Believing his lost honour makes him unworthy Tellheim breaks his engagement to Minna von Barnhelm, but she tracks him down to a Berlin tavern to win him back. To test his love Minna pretends she has also lost her wealth, prompting Tellheim’s protective instincts to finally override his stubborn pride. The film concludes with a royal decree from Frederick the Great, restoring Tellheim's rank and fortune and allowing the couple to marry.
