In the cycle’s prelude, greed and vengeance trigger a chain of events fraught with corruption and struggle.
The three Rhinemaidens, guardians of the river’s golden treasure, laugh and play, scarcely noticing the Nibelung Alberich, who tries with no avail to catch the sexy girls as they taunt him. They explain that this gold is all-powerful: if fashioned into a ring, its wearer would rule the world. But they are content that the gold is safe, since whoever would steal the treasure must renounce love. Hearing this secret, Alberich renounces love and escapes with the Rhinegold.
Fricka reproaches her husband Wotan for having promised her sister Freia to the giants Fafner and Fasolt as payment for constructing Valhalla; Wotan replies that he never meant to keep his word. When Fafner and Fasolt arrive to claim Freia, Wotan informs them that they must settle for another form of payment. Fafner, aware that the gods would lose their eternal youth and power without Freia’s golden apples, decides to take her hostage. The fire god Loge suggests that the giants might find Alberich’s gold an acceptable substitute for Freia and proposes that Wotan steal the gold, a portion of which Alberich has forged into a ring. The giants take Freia home until evening, when they will return to claim the Nibelung’s gold as ransom. Wotan asks Loge to accompany him to seek Alberich’s treasure.
In the underground caverns of Nibelheim, Alberich tries on the tarnhelm—a magical chain mail helmet his brother Mime has forged that transforms the wearer into any size or shape—and torments Mime. Wotan and Loge arrive and Alberich suspiciously questions them, warning of his plan to overthrow the gods and rule the world. Loge tricks Alberich into using the Tarnhelm to transform into a toad, and Wotan and Loge sieze him and drag him to the surface of the earth.
Back on the mountaintop, Loge and Wotan tell Alberich that they will free him only if he yields all his gold, the tarnhelm and the ring. After the ring is torn from his finger, the Nibelung leaves and places a curse upon it: until it returns to him, trouble, envy, and death will befall all who possess it. The giants return with their hostage Freia and demand the Nibelung gold, the tarnhelm and the ring in exchange for her. Erda, the earth goddess, appears and warns Wotan to yield the ring, spelling doom for the gods. Wotan then surrenders the ring, and Fafner kills Fasolt to claim the ring, the tarnhelm and the hoard for himself. Fricka urges Wotan to turn his thoughts to Valhalla, and Froh summons a rainbow bridge to take them there.