The latest issue of Life magazine prominently features Ricky in an article, and Lucy's excited until she discovers that there are no pictures of her. Lucy complains about this to Ricky, who says it isn't his fault and the two argue yet again about why Lucy should be allowed to go into show business. Ricky is at his wit's end. Fred observes that Lucy is only attracted to the glitz and glamour of stardom, but once she sees for herself the hard work that is involved, she'll give up any notion of becoming famous. Ricky decides to take Fred's advice and devises a plan he thinks will discourage Lucy from wanting a career in show business.
During rehearsal at the Tropicana, Ricky and Lucy rehearse a "challenge" routine where they each take turns doing a dance routine before passing it to the other. Lucy's dance routines are longer, complicated, and more grueling, while Ricky's are shorter, simple, and more laid-back. Collapsing into a heap, Lucy says she can't dance anymore and opts to go home and rest. Ricky, satisfied that he gave this an honest attempt, sends Lucy on her way, but not before one of his dancers reminds Ricky (in front of Lucy) that he hasn't yet chosen someone for the balcony number. Lucy begs to be allowed to do the number (all she has to do is sit with a rose in her teeth), Ricky reluctantly agrees and Lucy leaves exhausted, but satisfied.
Lucy comes home and tells Fred and Ethel about the rehearsal, and Fred lets it slip that he didn't think Ricky would go through with it, prompting Lucy to demand an explanation. Fred clues Lucy in on all the sordid details. Threatening to tell Ricky that Fred spilled the beans about Ricky's scheme, she gets him to agree to prepare her for her balcony performance.
At the Tropicana, Ricky serenades Lucy during the balcony number ("Lady of Spain"), but while he is singing to the audience, Lucy performs magic tricks (to the delight of the audience). The audience enthusiastically applauds and Ricky mistakenly thinks the applause is for him, so he sings a more up-tempo version of "Lady of Spain." Again, the audience enjoys Lucy's antics and Ricky begins singing, "The Loveliest Night of the Year." In her coup de grace, however, Lucy does a balancing act (courtesy of some wires she and Fred have rigged). Finally Ricky turns around and is horrified to find his wife floating in the air! She motions for Fred to bring her down, but Ricky orders him not to touch the wires and begins performing his signature "Babalu," using Lucy's backside as a conga drum!