The story opens at the opera in New York. In the audience is the novel's protagonist, Newland Archer, a cultured young man from the city's fashionable 'old money' society. Archer sees the girl he is to marry, May Welland, sitting in the box of the matriarch of her family, old Mrs Catherine Manson Mingott.
Mrs Mingott herself is too obese to attend. She is a respected figure in New York society, due to her indomitable nature and the impeccable decency of her life.
Archer reflects ardently on the innocence of his fiancee, and looks forward to educating her. Conversely, he would also like her to be as worldly-wise as his former married lover.
Also at the opera are Lawrence Lefferts, the foremost authority on form in New York, and Sillerton Jackson, an expert on society scandals. Lefferts is shocked to see Countess Ellen Olenska, May's cousin, in the Mingotts' box. Ellen has returned from Europe, where she was living with her philandering husband, a Polish Count. She has left him - an act unacceptable to the high society of the time - and reportedly had an affair with his secretary. Such is the disgrace into which Ellen has fallen that even Newland Archer, who approves of the Mingotts' private support for her, is disturbed at their publicly introducing her into their opera box. After all, this is the same box in which his wife-to-be is sitting. Their engagement is to be announced in a few weeks.
Archer decides that he must act to restore dignity to May's family and to help her through the ordeal. He visits their box and suggests to May that he should bring forward the announcement of their engagement to that night, at the Beauforts' ball.
Archer is introduced to Ellen. She recalls that they used to play together as children and that he was a "horrid boy" who kissed her behind a door. Archer is shocked at her disrespect for the fashionable society which is effectively her judge.
Julius and Regina Beaufort hold an annual ball in a room kept only for that purpose, a luxury which "was felt to compensate for whatever was regrettable in the Beaufort past" (Chapter 3, p. 16). Beaufort was a banker in his native England before he left amid rumors of shady financial dealings.
When Archer arrives at the ball, he sees that May is announcing their engagement to her circle. She asks him if he has told Ellen of their engagement. He has been reluctant to speak of it to her, but tells May falsely that he has not had the chance. May urges him to do so, since Ellen is feeling sensitive and May does not want her to feel forgotten. Archer agrees to tell Ellen, but May says that she has not come to the ball, deciding at the last minute that her dress was not smart enough. Archer knows that the real reason Ellen has stayed away is shame at her reputation, but he admires May's determination to "ignore the unpleasant" in refraining from mentioning this. He in turn does not show May that he knows what lies behind Ellen's absence.
It is significant that the novel opens at the opera. This introduces one of the recurring metaphors of the novel: that of performance, or keeping up an appearance of correct and moral behavior, whatever the reality might be. Repeatedly in this novel we encounter characters who behave badly but are welcome in New York society because they are discreet. (Julius Beaufort is an example.) The minute the facade slips and their offences against morality or taste become public knowledge, they are punished or even ostracized.
Wharton conveys the ease with which the unwary or unschooled can slip into the many social pitfalls: ". in metropolises it was 'not the thing' to arrive early at the opera; and what was or was not 'the thing' played a part as important in Newland Archer's New York as the inscrutable totem errors that had ruled the destinies of his forefathers thousands of years ago." (Chapter 1, p. 4)
Newland Archer is disconcerted by Ellen Olenska's appearance in the Mingotts' opera box because it is an offence against taste. While Ellen put up with her unhappy marriage, she was accepted, but when she left her husband with his secretary, her public offence against morality placed her beyond the pale of respectability. Ellen's disregard for the conventions of society becomes obvious in her first conversation with Archer. Instead of showing a fitting humility and seriousness before her high society judges (of whom Archer is a representative), she paints an undignified - but very human - picture of him and herself as children. Archer cannot tell Ellen about his engagement to May, a sign that the two inhabit two different worlds that Archer will fail to reconcile.
May Welland, seen through Archer's eyes, provides a contrast to Ellen. Her innocence is symbolized throughout the novel by the lilies-of-the-valley that form her bouquets. The lily-of-the-valley is a white flower which traditionally connotes purity and chastity. Archer feels happy at the thought that in her innocence, she does not even understand the seduction scene in the opera. Clearly, an innocence that depends on emotional ignorance is unlikely to stand up to the hardships of the real world.
Another theme introduced in these chapters is the contrast between the strict adherence to accepted morality in New York, embodied in May, and what is seen as the moral ambiguities of old Europe, embodied in Ellen.
New York high society, with its complex system of manners and mores, is the constant reference point against which most of the characters view themselves. They act to please society rather than themselves, in order to preserve the smooth running of the community. A tension is set up between the individual and society, and in the case of Ellen, that tension has been stretched almost to breaking point. She, uniquely at this point in the novel, has acted to please herself and earned the disapproval of her community. The implicit question is how this tension will be resolved: will she bend to society's dictates for the sake of a quiet life, or will she continue to carve her own destiny?
One way in which Wharton conveys the hypocrisy of society is by having characters refrain from saying what they truly think. Both Archer and May know the real reason why Ellen did not go to the ball at the Beauforts', but they keep up the pretence, even to each other, that it is because she didn't have a suitable dress. Archer admires May's ability to "carry to the utmost limit that ritual of ignoring the 'unpleasant' in which they had both been brought up" (Chapter 3, p. 22). Again, a tension is created, in this case between what characters know to be reality and what they pretend or express. We feel that this is a tenuous state that cannot sustain itself, and wait in suspense for the cracks to appear.