Arms and the Man begins in November, 1885. Raina is seen at the open balcony window on the second floor of the Petkoff house in a small Bulgarian town. Her mother enters with the news that Raina’s fiance, Sergius, has just led the Bulgarians to victory in battle against the Serbians. Raina rejoices; her idealistic expectations of war and soldiers have been met. The servant Louka enters to tell them that the army has ordered people to stay indoors and lock and bolt all doors and windows while stragglers are being pursued in the streets. Catherine and Louka leave. There are shots outside, and Raina blows out the candles and takes to her bed. The figure of a man appears in the window and stumbles into the room. He closes the shutters, threatens to shoot Raina if she makes noise, and tells her to light a candle; he is revealed as a Serbian artillery officer, battered and exhausted, nervous and hungry. Soldiers at the door demand to search the room; a man has been seen climbing to her balcony. On impulse, Raina hides the man behind the drapes; an officer enters, is assured by Raina that there is no one else present, and leaves apologizing.
Raina and the man talk, she despising him for being a cowardly and ignoble soldier, he trying to explain to her the realities of battle. When he complains of hunger, she gives him a box of chocolate creams. The man identifies a portrait of Sergius as the man who led the cavalry charge that won the battle—but only because the Serbians had the wrong ammunition for their guns; the man thinks him a romantic fool who won the battle by doing the professionally wrong thing. Raina understandably objects strongly. Further noises from the street move the man, who is not nearly as fierce as he at first seemed, to leave and take his chances, but Raina, at pains to demonstrate her aristocratic ideals and background, says that she will save him. She goes to get her mother; they return to find him asleep on the bed.
Act 2 begins four months later in the garden of the Petkoff house; it is morning. Louka and Nicola are arguing; Nicola tells Louka that she must not be impertinent to the Petkoffs. If she is, they will discharge her—and he is depending upon the Petkoffs to be his customers when he sets up his shop; if the family turns against her, they will not patronize him. Major Petkoff returns from the war, and Catherine enters to greet him. Sergius, a romantically handsome, Byronic man, is shown in. He is bitter that, having won the battle the wrong way, the army now refuses to promote him; he intends to resign his commission in disgust. Raina enters and there is talk of a tale Sergius and Petkoff have heard of a Swiss officer being rescued by two Bulgarian women. Sergius and Raina are left alone and engage in romantic, high-minded, worshipful talk. Raina leaves to get her hat; Louka enters to clear the table, and Sergius attempts to cuddle and kiss her. Louka taunts Sergius about his lack of high-mindedness where she is concerned and says that she has a secret about his fiancee and a strange man. Louka leaves and Raina enters, but Petkoff calls Sergius into the house to help settle details of getting several regiments back to base. Raina and Catherine are left to discuss the caddishness of the Swiss soldier in revealing to strangers his escape at the hands of two women; Raina then exits. Louka announces a Captain Bluntschli, a Swiss officer. Catherine realizes that he is the man who took refuge in her room; he has come to return the coat he was given as a disguise when making his escape. When he appears, she begs him not to reveal the identities of the women who aided him and tries to get him out of the way quickly. Just as he is going, Petkoff appears and insists that he stay, especially to help with the transport of the regiments. Raina enters and blurts out: “Oh! The chocolate cream soldier!” She manages to cover her mistake, and Bluntschli is prevailed upon to stay as a guest.
Act 3 occurs after lunch the same day. In the Petkoffs’ library, Sergius and Bluntschli are writing orders for the movement of troops while Petkoff reads his paper. Petkoff wants his comfortable old coat but cannot find it. Catherine says that it is in the blue closet (where she has put it after getting it back from Bluntschli). To Petkoff’s amazement, Nicola returns with the coat. All leave except Raina and Bluntschli, who talk of lies (Raina’s), gratitude, and practicality versus the false idealism of romanticism. Bluntschli sees through her pretense of noble ideals, and when Raina suddenly realizes this she admits that he has found her out. Raina says that she put a photograph of herself in the pocket of the loaned coat. Bluntschli, however, pawned the coat; since he never found the photograph, it is presumably still in the coat. Bluntschli receives delayed mail which tells him that his father is dead and has left a number of big hotels to him; he determines to leave for Switzerland within the hour and exits.
Raina leaves, and Louka and Nicola talk. Nicola, a practical man, suggests that in the long run it would be better if Louka and Sergius married and became very profitable customers for Nicola—but Louka must not be impertinent or she will lose her (and his) chances. Sergius enters and, after Nicola leaves, plays up to Louka again, since he is still disillusioned about life and his own inability to measure up to his ideals. Louka tells Sergius that Raina will marry Bluntschli, the secret lover she had intimated to Sergius earlier. Bluntschli enters and Sergius challenges him to a duel; Bluntschli agrees, taking a very practical view of the affair—he chooses machine guns. Raina enters and wants to know why they are going to fight. Raina now suspects what is going on with Louka and becomes disenchanted with Sergius. Sergius concludes that life is a farce and now there is no need for a duel. Raina comments that Sergius will have to fight Nicola, since he is Louka’s fiance; Sergius becomes even more disillusioned with life.
Louka has been listening at the door, and Sergius pulls her in just before Petkoff enters and wants his coat again. Raina gets it from Nicola, helps her father put it on, and slips the photograph (which Petkoff had found earlier and had been mystified by) from the pocket. Bluntschli reveals to all that he was the chocolate cream soldier. Louka and Sergius become engaged. Bluntschli laments that, in spite of his cool, efficient exterior, he has always had a romantic streak which led him to run away from home, to join the army, and to return the coat in person, hoping to see Raina again. When Bluntschli discovers that Raina is really twenty-three and not seventeen, as he had supposed, he swiftly proposes. When challenged by the Petkoffs about his station and prospects, he informs them that he has just inherited six hotels, many horses and carriages, and much equipment. Catherine is now impressed, and Raina, after pretending to sulk, agrees to marry Bluntschli. With a final businesslike remark to Petkoff about troop movements, Bluntschli promises to return punctually in two weeks and takes his leave. Sergius supplies the final comment: “What a man! Is he a man!”