Act I opens with a Historian providing an overview of medieval England and the story of King Arthur, his Knights of the Round Table, and their quest to find the Holy Grail. In an apparent miscommunication, a Scandinavian village appears with Finnish villagers who sing about Fisch Schlapping in Finland. The Historian reappears to correct the Finns telling them he was referring to ENGland, not FINland. The audience is then transported to a medieval English forest where King Arthur is traveling with his servant Patsy. Arthur and Patsy are trying to recruit Knights for the Round Table to join him in Camelot. They encounter two guards at the castle gates who are more interested in discussing how swallows could carry a coconut than they are in listening to the King recruit for his quest.
Arthur and Patsy meet Sir Robin, who is collecting plague victims, and Lancelot, who is trying to dispose of the sick man named Not Dead Fred. They agree to become Knights of the Round Table. Arthur then meets a peasant named Dennis Galahad and tries to convince him that he is the King of England because he was given a sword named Excalibur by The Lady of the Lake, a woman with mysterious powers who lives in a lake. Dennis and his mother are political radicals and refuse to believe a king who was given a sword by a woman living in a lake could be ruler over them. To prove he is the legitimate king, Arthur has The Lady of the Lake appear with her Laker Girls. Arthur then has Dennis knighted Sir Galahad and they are then joined by Sir Robin, Sir Lancelot, and Sir Bedevere – now all Knights of the Round Table.
At the Castle of Camelot - which looks strikingly similar to a Las Vegas hotel - a Cher look-alike (The Lady of the Lake) and a cast of other characters join Arthur, Patsy and the Knights to dance and sing. Arthur then has a divine visit from God who gives him the heavenly quest to find the Holy Grail, the cup that Christ used at the Last Supper. Encouraged by The Lady of the Lake to “find the grail”, Arthur and the Knights set off to do so, but upon arriving at a French castle they are taunted viciously by rude French soldiers. The Knights retaliate by sending a large wooden rabbit, in the style of a Trojan Horse, into the French castle. However, they realize a major oversight on their part - they forgot to hide inside of it. They leave in a hurry when the French soldiers begin to taunt them again, sending in Can-Can girls and raining small animals down on them.
At the beginning of Act II, Arthur is distressed by the French soldier’s taunting and the humiliation suffered at their castle. He retreats with Patsy to The Very Expensive Forest where they meet the Knights of Ni who rule the forest. The Knights of Ni demand that all those who enter must offer shrubbery as a sacrifice to them. Deflated, because they have no shrubbery to offer, Arthur & Patsy are joined by their knights who help cheer them up to “always look on the bright side of life.” They feel their luck changing as they come across some shrubbery.
Sir Robin’s minstrels sing of his bravery, which makes Robin quite queasy. King Arthur and Patsy try to take the shrubbery to the Knights of Ni but are met by the Black Knight who does not let them pass. Arthur draws his sword and a battle ensues between him and the Black Knight.
After the fight, Arthur runs into Robin, who, having heard of the danger he might encounter, seems to be running away. The Knight of Ni and his knights enter and when Arthur offers the shrubbery as a sacrifice, they claim they are no longer the Knights of Ni but now go by another name - the Knights of Ecky Ecky. The shrubbery no longer relevant, they give Arthur a new test - that of producing a Broadway musical.
Arthur is perplexed because he has never heard of Broadway. Robin tells Arthur all about Broadway and that they will need Jewish people to be involved in their production in order to be successful.
In another part of the Expensive Forest, Lancelot is riding with his page, Concorde. An arrow with a message hits Concorde and upon reading the note, they realize that a distressed person is being held in the tall tower of the Swamp Castle. Believing this might be a sign leading them to the Holy Grail, Lancelot bids Concorde farewell and rides off heroically to see whom he can save at the Swamp Castle.
In the meantime, in true diva fashion, The Lady of the Lake is impatient for her next song. She feels snubbed by the producers of the show because she has not been on stage since Act I and laments “what ever happened to her part?”
At Swamp Castle, Prince Herbert is in his chamber, holding the bow he used to fire the arrow with the message of distress into Concorde. Herbert’s father is holding him captive there because he has arranged for him to marry a landowner’s daughter. Since they live in a swamp, they are very much in need of land so the marriage is quite advantageous to the family. The father orders the guards to stand watch over Herbert so he does not leave his room and escape the pending marriage.
Lancelot arrives at Swamp Castle anxious to save, whom he believes from the note, to be a damsel in distress. He realizes it is actually Prince Herbert who sent the note and needs rescuing. Herbert’s father and Lancelot argue because Lancelot has killed many of the wedding guests in his attempt to save Herbert. The uncaring and callous father nonchalantly slices the rope that Herbert is hanging from, thinking Herbert will die in the fall. When Herbert does not die, Lancelot then comes to his defense against his bullying father. Herbert & Lancelot then happily break into a Carnival in Rio dance number.
Meanwhile, Arthur and Patsy discuss the fact that they have not yet found any Jews to help them with their Broadway musical. A discouraged Arthur laments his being “all alone” while totally ignoring the ever-faithful Patsy who has never left his side. The Lady of the Lake joins them and tells Arthur that she has been with him all the time as well. When Arthur asks her to help him produce a Broadway show, she explains what he should have seen all along - that he ALREADY IS IN a Broadway show.
But Arthur still has not forgotten God’s command for him to find the Holy Grail. He realizes that although his journey has taken many twists and turns, his search for the grail has led him to the most obvious place to find it . . .