Kai and Gerda are best friends who share adventures and delight in stories, when they aren’t tending to a Rose that grows between their windows (Up Here). One day Gerda is tall enough to reach a dusty book on her Grandmother’s shelf (Once upon a Time). The book tells the story of the Snow Queen and her two mirrors – one that reflects all that is good and beautiful, and another it’s opposite. Gerda’s Grandmother catches them reading the book and reveals more of the story. She tells them how a Troll steals the Queen’s dark mirror and raises it above the world, but it shatters – sending shards into the eyes and hearts of unsuspecting people, giving them negative feelings and a cynical outlook. Grandmother says the Snow Queen takes children to her ice palace and breathes the cold into their lungs with a kiss in order to create a Snow Flake army. Kai and Gerda ask if the story is true, but the Grandmother is vague.
That night, The Snow Queen comes by their windows (So Far Away). Kai sees her and is entranced. When she leaves, the wind kicks up pieces of the shattered mirror, infecting Kai in his heart and eye. The Troll appears and explains The Real Reality of Kai’s situation before disappearing to cause mischief elsewhere.
Gerda finds Kai the next morning, but he is changed. He sees the world as cold and dark and cruelly tells Gerda he doesn’t want to play with her anymore. Gerda is upset and wonders what happened to her friend (That’s Not My Best Friend).
Kai begins to see the world differently, intoxicated with the beauty and logic of numbers and geometric patterns. The Snow Queen appears, drawn to the mirror fragments in his eye and heart (You are Mine/Kiss Me Again). She breathes her icy breath into his lungs with a kiss and offers to take him to her ice palace, where everything is clean and beautiful. Kai eagerly agrees to go but wants her to Kiss Me Again. The Snow Queen declines, telling Kai that three kisses will kill him. The ice from the first kiss as already begun to freeze all the aspects of his humanity.
Gerda watches as Kai leaves with the Snow Queen. Determined to go after him, she disobey her Grandmother and starts her journey (Gone). When she reaches the river, the Troll pushes her in (Into the River.) In order to not drown, she must get rid of all her belongings and trust the flow of the River (The Witch and the River). A Witch notices Gerda in the water and helps her get out. The Witch is a gardener and once she learns Gerda loves flowers weaves a magic spell causing Gerda forget who she is and accept the Witch as her Mother (Through You).
Kai, meanwhile, begs the Snow Queen for another kiss (Kiss Me Again (Reprise)). She says no and shows Kai her remaining Mirror, the Mirror of Reason. She believes he has the power to solve the Riddle of Eternity locked within it. Because he has the mirror pieces lodged in his eye and heart, she gives him another kiss to open his eyes to the wonders of the ice (Kiss You to Death) and his mind to the complexity of the riddle.
The spell on Gerda is broken when she see a rose and confronts the Witch. Armed with petals from the flowers, she continues her journey realizing for the first time she is alone. Kai, in the ice palace, realizes the same thing and thinks about Gerda (Alone Together). Gerda is about to give up when she meets a Crow who tells her that a boy matching Kai’s description just married the Princess. He summons his bird squadron and they teach her to fly (Flying).