A widowed queen sends her daughter - who is betrothed to a prince in a far-off land - to her bridegroom. She sends her with a waiting maid. The princess's horse is named Falada, and he is magical for he can speak. The princess is given a special charm by her mother that will protect her as long as she wears it. She then mounts Falada while her maid servant mounts her nag and off they go.
The princess and her servant travel for a time, then the princess grows thirsty. She asks the maid to go and fetch her some water, but the maid simply says: "If you want water, get it for yourself. I do not want to be your servant any longer." So the princess has to fetch herself water from the nearby stream. She wails softly: "What will become of me?" The charm answers: "Alas, alas, if thy mother the queen knew, her heart would break in two." After a while, the princess gets thirsty again. So she asks her maid once more to get her some water. But again the evil servant says, "I will not serve you any longer, no matter what you or your mother say." The servant breaks her goblet, leaving the poor princess to drink from the river by her dainty little hands. When she bows to the water her charm falls out of her bosom and floats away. That's why she is quite helpless now.
The maid takes advantage of that. She orders the princess to change clothes with her and the horses as well. She threatens to kill the princess if she doesn't swear never to say a word about this reversal of roles to any living being. Sadly, the princess takes the oath. The maid servant then rides off on Falada, while the princess has to mount the maid's nag. At the palace, the maid poses as princess and the "princess servant" is ordered to guard the geese with a little boy called Conrad. The false bride orders Falada to be killed as she fears he might talk. The real princess hears of this and begs the slaughterer to nail Falada's head under the doorway where she passes with her geese every morning.
The next morning the goose girl addresses Falada's head under the doorway: "Falada, Falada, there thou art hanging", and Falada answers "Bride, bride, there thou art ganging! Alas, alas, if thy mother the queen knew, her heart would break in two." On the goose meadow, Conrad watches the princess comb her beautiful hair and he becomes greedy to pluck one or two of her golden locks. But the goose girl sees this and says a charm: "Blow wind, blow, I say, take Conrad's hat away. Do not let him come back today until I am finished brushing my hair." And so the wind takes his hat away, and he cannot return before the goose girl has finished brushing and plaiting her hair.
Conrad angrily goes to the king and declares he will not herd geese with this girl any longer because of the strange things that happen. The king tells him to do it one more time, and the next morning hides and watches. He finds everything as Conrad has told. That evening, he asks the princess to tell him her story. But she refuses to say anything because of her oath. The king suggests that she might tell everything to the iron stove. She agrees, climbs into the stove and tells her story while the king listens from outside.
As the king is convinced she has told the truth he then has her clad in royal clothes. He presents her to the false princess at dinner that evening, but the false bride does not recognize the princess in her new finery. The king tells her about a servant who has done what she has done and lets her find an appropriate punishment for the wrongdoer. The false bride answers that she should be thrown into a cask stuck round with sharp nails and that two horses should drag it from street to street till she is dead. So the king does to the false bride.
After that, the prince and the princess are married and then reign over their kingdom for many years.