In the hall of the Gibichungs, lord Gunther asks his clever half-brother Hagen (whose father is Alberich) how could he win more fame and glory. Hagen says that Gunther should marry and only one wife would be noble enough for him: Bruennhilde who is surrounded by magic fire which only the bravest of heroes can penetrate. Gunther moans: he lacks the courage for such a task, why did Hagen have to mention that? Hagen says that indeed, the one with such courage is Siegfried - who is the person Gunther's sister, Gutrune, should marry. Gutrune thinks Hagen is jesting: how could she charm the bravest hero in the world? Hagen reminds her of a magic potion which would make Siegfried lose his memory and fall in love with the first woman he sees. Gunther admires Hagen's cleverness, but asks how they can find Siegfried.
Hagen replies that Siegfried is wandering, searching for new heroic deeds to be achieved and he might drop in here any day. Surprise surprise, that's when we hear Siegfried's hunting-horn. He has come to visit the castle and wants to see Gunther, Gibich's son. Hagen calls him by name (explaining later that of course everybody had heard of such a great hero and that's how he knew Siegfried). Siegfried wants Gunther to either fight with him or become his friend. Gunther, who evidently is not the bravest of living men, prefers to become his friend. Hagen leads Grane to the stables as Siegfried follows Gunther into the castle.
As Hagen returns, he inquires if it is true that Siegfried is really the owner of the Nibelung treasure hoard. Siegfried briefly describes his encounter with Fafner. Hagen asks if Siegfried took anything from the hoard. Siegfried shows him the Tarnhelm, which Hagen immediately identifies. He tells Siegfried of its powers: it allows its wearer to change shape at will and to travel from one place to another at the speed of his thought (this latter power was never mentioned nor used before). Siegfried also mentions the Ring and says "a most marvellous lady" is keeping it safe. Gutrune appears and gives a "welcoming toast" to Siegfried. It is the magic potion which makes Siegfried lose his memory and fall madly in love with Gutrune. The unfortunate Siegfried drinks the toast "for Bruennhilde" [he speaks these words "aside" so Gunther does not know that Siegfried's beloved is none other than Bruennhilde].
Siegfried wants now to marry Gutrune. When hears about Gunther's "beloved", Bruennhilde, and the fires which surround her rock, his mind is struggling to throw off the spell of amnesia, but up to no avail. He devises an ingenious plan: he will use the magic of the Tarnhelm to disguise himself as Gunther and win Bruennhilde for Gunther, if Gunther lets him marry his sister, Gutrune. It's a deal, says Gunther and Hagen makes Gunther and Siegfried swear an oath of bloodbrotherhood before Siegfried leaves to conquer Bruennhilde for Gunther. [It is indeed possible - even likely - that Gunther never realized Bruennhilde was Siegfried's beloved. Had he known that, he might not have been so eager to take part in this plot]. Hagen sits on watch, waiting for Siegfried's return and when left alone, reveals his true plans: he is only interested in the Ring and is using Siegfried and his half-brother, Gunther, only as pawns in his master scheme.
Meanwhile, Bruennhilde has a visitor: her Valkyrie sister, Waltraute, rides in on a flying Valkyrie horse with a clap of thunder - against Wotan's orders. She tells Bruennhilde the lates news from Valhalla: how Wotan no longer goes wandering, but just sits on his throne, doing nothing. Wotan has said that only if Bruennhilde would give the Ring back to the Rhinemaidens, the gods and the whole world would be freed from its Curse. Bruennhilde has no intention of throwing her precious Ring away and she angrily tells Waltraute to leave. Waltraute, seeing that her pleads can only be refused, leaves predicting some horrid fate for Bruennhilde, gods and everyone.
Bruennhilde hears a horn - she thinks Siegfried is coming back. But the figure who emerges from the fire is Gunther (actually Siegfried in Gunther's guise). He imitates Gunther's voice and informs the terror-stricken Bruennhilde that she is now Gunther's wife. He takes the Ring from Bruennhilde's finger. He decides to spend the night here, but proclaims that Nothung will guard his oath of bloodbrotherhood during the night.
Next:Götterdämmerung, Act II