Act 1
The children Gerda and Kay listen to the Grandmother telling them about the Snow Queen, whereupon Kay imagines bringing the Snow Queen into the warm room and watching her melt. Gerda tells him how the devil created a magic mirror which makes everything beautiful look ugly and that it has broken into a million tiny pieces. She explains that anyone getting one of these splinters in their eye or heart would only see the imperfections in things; the coldness causing their hearts to become numb. That night, Kay is so afraid that he cannot fall asleep. When he sees the Snow Queen at the window he is terrified.

While Gerda and Kay look at the blooming roses Kay is suddenly being pierced by something into his heart and then into his eye. From this moment on, he too only sees the imperfection of the flowers whereupon he mocks Gerda and picks the roses to pieces.

The friendship between Kay and Gerda is weakened. Instead of playing with her, Kay would rather play with the other boys who do not let him join their game. At the same time Kay admires the symmetry and perfection of the ice crystals. The Snow Queen appears on her sled and takes the boy with her.

The Snow Queen flies with Kay to her ice palace. She kisses him on the forehead, causing him to lose his feeling of coldness and forget the world he once knew.

Act 2
Gerda has begun the search for Kay and finds herself in the Old Woman's garden where the flowers sing her the song of the three dead sisters. But Kay, they announce, is not dead. Gerda leaves the garden and continues her search.

Upon meeting the Forest Crow, Gerda learns that the princess has been looking for a man who is her equal in wisdom. Since Gerda suspects that Kay might be the chosen one the Forest Crow brings her to the castle of Prince and Princess. Arriving at the Castle, the Castle Crow allows Gerda to enter but is immediately haunted by sinister and eerie apparitions. When she finally finds the princess and her prince, she realizes her mistake. The Prince and Princess reward the Crows for their good deed and promise to help Gerda. Gerda is permitted to sleep in the Prince's bed. In a dream she sees Kay on his sleigh.

Act 3
Prince and princess have given Gerda her their golden coach so she can continue her search for Kay. In the forest the carriage is ambushed by robbers, killing all the travellers except Gerda. With the help of the reindeer, which takes Gerda further north, she meets the Finn Woman. The reindeer tells the Finn Woman of how Gerda was held captive by the robbers and about the assumption that Kay is with the Snow Queen. The Finn Woman eventually explains the background of Kay's disappearance. She encourages Gerda in her search but declines to endow her with special powers, for Gerda is already in possession of all the abilities she needed to find Kay. She instructs the reindeer to take Gerda to the Snow Queen's kingdom and then return.

Arriving in the Snow Queen's kingdom, the reindeer bids farewell to Gerda, kissing her on the mouth and weeping. The cold hits her and the Snow Queen's outposts urge her to turn back. But the angels that arise from her breath protect her from the threat.

Meanwhile, in the Snow Queen's ice palace, Kay is confronted with the task of finding the perfect word but he is almost petrified with cold and despair. The Snow Queen has left the palace. When Gerda finally finds him, both begin to cry. Through the tears, Kay is freed from the splinters in his eyes and heart. Together Gerda and Kay discover the word ‘eternity’.

When Gerda and Kay return home, the grandmother is still reading a picture book. But Kay and Gerda have grown up and yet remained children at heart. It is summer again.