A spring day in a poor quarter of Saint Petersburg.
The eccentric Herman confesses to Tomsky that he is in love with Lisa, whom he has only admired from a distance. Herman is encouraged by Tomsky, a newly wealthy social climber, but mocked by his comrades Chekalinsky, Surin, Chaplitsky, and Namurov.
Prince Yeletsky appears and introduces Lisa as his fiancée. Though fascinated by Herman, Lisa has decided not to get involved with him, as only a marriage of convenience to the prince offers her the opportunity to escape her poverty. Herman is stunned. Lisa’s grandmother, the old countess, enters. She is both repelled and fascinated by the sight of Herman – as he is by her.
Tomsky recounts the rumors about the countess’s nickname, “Queen of Spades”: It is said that as a young woman, she caused a stir in Paris as the “Muscovite Venus.” After gambling away her entire fortune, she fell prey to the Count of Saint Germain, who revealed to her the secret of three invincible cards in exchange for a night of love. The countess won everything back and later entrusted the secret to her husband and a lover. However, she was warned by an apparition that a third lover would attempt to learn the secret of the cards, thereby bringing about her death.
Herman is known to watch games of chance all night long but never take part himself. Now his comrades goad him: if he were the old countess’s lover, he could play without putting himself at risk.
Before the wedding, Lisa says goodbye to her friends Polina and Masha and the other women who live in their building. Only when she is alone do her repressed feelings for Herman catch up with her. Suddenly Herman stands before her and threatens to kill himself, saying he cannot live without her. He has to hide, however, at the return of the old countess, who has been spying on her granddaughter. Once Lisa and Herman have been left alone again, she confesses that she loves him too.
To celebrate Lisa’s departure, her neighbors rehearse and put on a play, “The Faithful Shepherdess.” The piece is actually a bitter commentary directed at Lisa: unlike the titular shepherdess, Lisa has chosen money and social advancement over her love for a pauper.
Herman’s comrades continue to shock and unsettle him with their teasing allusions to the old countess. Lisa manages to get away from Prince Yeletsky and smuggle a key to Herman, telling him he can use it to get to her room by way of the countess’s bedroom. He tells her to expect him that night.