The citizens of Oz are celebrating the death of the Wicked Witch of the West (No One Mourns the Wicked). Glinda the Good appears to reassure the people that goodness has in fact prevailed over evil. One of the citizens questions if it is true that Glinda was her friend. She admits it, and explains the story of how they met.

Elphaba (later known as the Wicked Witch) was the daughter of the governor of Munchkinland, and was born a rather abnormal shade of green. Her father hated her, and showered his love on her younger sister, Nessarose, who was confined to a wheelchair. The two girls go together to Shiz University, where the attractive and popular Galinda is also in their class (Dear Old Shiz). The headmistress, Madame Morrible, chooses to take Nessarose under her protection, in spite of Elphaba’s arguments. Elphaba is now with out a roommate, and eventually ends up with Galinda, to the satisfaction of neither. When Elphaba’s protectiveness of her sister manifests itself physically, Madame Morrible recognizes that she’s got unique powers and chooses to show her sorcery - and to teach no one else, despite the fact that Galinda had her heart set on studying with her. She also informs Elphaba that her powers might enable her to work with the Wizard, some thing which Elphaba has wanted (The Wizard and I)

Doing this does little to endear Elphaba to Galinda, and the feeling is much more than mutual (What is this feeling?). Their hatred of one another is noticeable during their classes, like their history class with Dr. Dillamond. The professor is the only animal professor at the university, and is starting to suffer from discrimination, even from the students. He tells Elphaba that there is a conspiracy to prevent the animals from communicating, and she wants to let the Wizard know, for he would undoubtedly stop it (Something Bad).

At the same time, a young roguish prince, Fiyero, has arrived at Shiz. Galinda is thrilled when Fiyero shares his life philosophy (Dancing Through Life). They all decide to have a party that evening. Boq, a Munchkin that has established a crush on Galinda, attempts to invite her to the party, but she convinces him rather to ask Nessarose, leaving her free to go with Fiyero. Nessarose is delighted, and informs her sister how she and Boq are meant to be together, and how Galinda helped it happen. When Galinda offers Elphaba a hat to wear to the party, Elphaba starts to speculate if she was incorrect about her roommate.

At the party that evening, Boq tries to share with Nessarose the actual reason he asked her, but is not able to harm her feelings. She is getting besotted with him. Madame Morrible arrives to tell Galinda that she can join her sorcery class - as Elphaba requested it. Elphaba herself arrives, wearing the hat Galinda presented her, which was in fact a cruel joke. All the other students laugh and stare as Elphaba dances on her own. Galinda feels bad, and goes to dance with Elphaba. Before long everyone is dancing, and the two girls look at each other in a new light.

In their room, the bonding proceeds. Galinda makes a decision that she will help Elphaba become Popular. When Elphaba gets to class the next day, Fiyero sees Galinda’s influence, and informs Elphaba that she does not need to change. Dr. Dillamond arrives to tell the class he is going - he is no longer permitted to teach. Elphaba wants to assist, although not a soul will stand up with her. The students are introduced to the new technological advancement of the cage, that will keep animals controlled, so that they never learn to speak. Elphaba’s outrage can not be contained, in the following chaos, she and Fiyero seize the lion cub in the cage and escape.

Fiyero is confused about what he has just seen, and what he is doing, but he is involved in Elphaba’s passion. She thanks him for assisting her, and they share a little moment before he has to go away. Elphaba reminds herself that it’s useless to wish for something to happen between them (I’m Not that Girl). Madame Morrible comes and informs her that the Wizard has asked to meet her. Nessarose and Galinda come to see her off, and Fiyero comes too. Galinda is saddened by Fiyero’s emotional distance from her, and attempts to win his respect by changing her name to “Glinda”, in solidarity with Dr. Dillamond. Although Fiyero hardly notices, saying goodbye to Elphaba. Elphaba invites Glinda to the Emerald City with her (One Short Day).

Finally, the two girls stand in front of the Wizard. He happens to be not quite as scary as they imagined (A Sentimental Man). He promises Elphaba that he will grant her wishes if she proves herself. Madame Morrible appears - she is the Wizard’s new “Press Secretary”. She gives Elphaba an old book of spells, and asks her to test a levitation spell on the Wizard’s monkey servant. But, the spell doesn’t go the way Elphaba plans, and she finds out that the Wizard is the one behind the suppression of the animals. He offers her and Glinda everything they’ve ever wanted if they can help him, although Elphaba is unable to conform. She runs away, and in order to avoid the truth from getting out, Madame Morrible spreads reports that Elphaba is “wicked” and not to be trusted. This only reaffirms Elphaba’s notion that she must go out on her own to make things right (Defying Gravity).

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