In a rural fishing lodge in Georgia, Froggy LeSueur, a British demolitions expert who sometimes runs training sessions at a nearby military installation, is trying to put his friend, Charlie Baker at ease. Charlie, a science fiction editor whose wife finds him boring, has come along for a much needed getaway. The problem is he is pathologically shy and is terrified at the prospect of having to converse with strangers at the lodge for three days.
Froggy must leave to tend to his military responsibilities, so, in an attempt to help his shy friend, he tells Betty, the owner of the lodge, that Charlie is from an exotic foreign country and neither speaks nor understands English.
Thus, conversations at the lodge carry on around Charlie much as if he weren't there at all, since it is assumed he can't understand them anyway. For example, Catherine Simms informs her fiancé, the reverend David Marshall Lee, that he isn't as sterile as he said he was and that she's pregnant.
Owen Musser, county property inspector who has been threatening to condemn the lodge, wants a private conversation with the Reverend David. In the process, Charlie overhears a plot to undermine the value of the lodge through condemnation so that David can buy it at a bargain price. In addition, Ellard Simms, Catherine's slow-witted brother, appears on the scene, and it becomes apparent that David is trying to make him appear to be an idiot so that he can't inherit his half of the family money.
Through little effort on his part, Charlie endears himself to almost everyone by being a good listener (much better than they know) as they relate their problems to him. He doesn't judge, nor does he give advice. So, Ellard tries his hand at teaching Charlie to speak English. Maybe poor Ellard isn't so stupid after all, as Charlie makes him seem to be a natural teacher.
David and Owen soon appear with a box of ledgers, records and even dynamite, apparently salvaged from a fire of some sort. Owen's van contains weapons and uniforms enough to reunite the “Georgia Empire.”
Froggy returns and is surprised at how well his shy friend is doing. Charlie entertains by relating a story in a strange, unintelligible dialect. Froggy agrees to return the next day, and, in private, Charlie reveals that he is having a wonderful time and may even be acquiring a personality.
Owen returns and Charlie has some fun tormenting him. David shows up with his new van, and Charlie demonstrates how well Ellard has taught him in just two days. Catherine agrees that Ellard is indeed smart enough to receive his part of the inheritance, much to the dismay of David, who decides a hasty marriage to Catherine might be in his best interest after all.
Charlie agrees to teach a bit of his “native tongue,” and has a good deal of fun at Owen and David's expense. Owen, unable to stand any further torment, rages that the Klan will soon be coming to purge the land of foreigners. As Act One concludes, the power has been cut off and the lodge is in virtual isolation and darkness as everyone turns to Charlie for a solution.
As promised, the Klan appears, torches blazing. Through a series of tricks involving Ellard, a trap door and a croquet mallet, the Klan is vanquished and David is exposed for what he really is.
Froggy returns, ready for the “vacation” and Charlie's masquerade to end. By mutual agreement, Charlie decides to stay on with his friends at the lodge as “The Foreigner” in order to teach and be taught.