Ann (Hepburn) is the crown princess of an unspecified country. She is on a widely publicized tour of several European capitals, including Rome. One night, she is overwhelmed by the strenuous demands of her official duties, where her day is tightly scheduled. 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 by herself.
The injection eventually takes effect and she 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 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 without awakening her. The next morning, Joe hurries off to work, leaving the princess still asleep.
When his editor, Mr.Hennessy (Hartley Power), asks why he is late, Joe lies to him; he claims to have attended a press conference for the princess. Joe makes up details of the alleged interview until Hennessy informs him that the princess had suddenly "fallen ill" and the conference had been canceled. Joe sees a picture of her and recognizes the young woman. Joe and Hennessy end up making a bet on whether Joe can get an exclusive on the princess.
Joe realizes he is sitting on a windfall. Hiding the fact that he is a reporter, he offers to show Rome to Anya, but not before getting his photographer friend, Irving Radovich (Eddie Albert), to tag along to secretly take pictures. However, Anya declines Joe's offer and leaves.