
Overcome, Gaston accidentally reveals that he loves Gigi. She tells him that she isn't the type of girl to want publicity or to be dumped one day by Gaston and to have to repeat a loveless relationship with another man afterwards. Gaston talks to Gigi as well, who denies him. He proposes an arrangement to Gigi's aunt and grandmother for Gigi to be his mistress and to receive good care for it. As he states, "when did her spark become a fire? And her warmth become desire?" Although he has doubts due to their enormous age difference, he also realizes that he loves her even more than he thought (unheard of between a man and a mistress) and he wants to be with her. Then, he stops and realizes suddenly, that she has become a woman who's charms, wit, and personality has sent his head spinning. He thinks about her beauty, grace, and sense of fun.

As he walks, he starts to reflect about Gigi. Gigi's grandmother refuses and tells Gaston that this may ruin her reputation to be seen unchaperoned with Gaston before her reputation has even began. He tells her that she looks lovely, and that he will prove it to her by taking her to tea. He storms out, realises his folly, and rushes back to apologize. Entranced, Gaston stammers out that she looks like a giraffe and that he misses her old outfits. When Gaston returns, he is overjoyed when Gigi appears in her new dress. Gigi, though miserable, accepts this as a necessary evil. Madame Alvarez, though dubious at first, agrees to let Gigi train around the clock to prepare for Gaston's return. During this time, Gigi's aunt and grandmother discuss the possibility of becoming Gaston's mistress, thereby fulfilling their goals for her. Honoré states, "I have not seen him this happy in years." Once Gigi and her grandmother return, Gaston goes to Monte Carlo for some time.

Gigi on the other hand, is pulling Gaston out his depressive rut with her carefree, fun attitude. Meanwhile, other women at the resort are shown hold perfect poise constantly and give off an air boredom and disdain for anything unfamiliar.

While Gaston and Gigi spend countless hours having fun together, Honoré and Madame Alvarez reveal their once passionate relationship. Gaston agrees and they all travel to the country. Gigi, always the light in Gaston's eyes, makes a wager during a card match with Gaston, suggesting that if he loses, he has to take her and her grandmother to the sea with him when he goes on vacation. After publicly humiliating his latest mistress who attempted to run off with an ice skating instructor, Gaston finds himself even more bored as he tries to redeem himself by throwing countless parties. The whole of Paris watches his every move, and Parisian high society shows unrestrained judgment towards him, his endless string of mistresses, and the rest of the mostly fleeting relationships high society has to offer. Gaston is known, much like his uncle as a wealthy womanizer. Remaining true to her girlish, yet charming personality, she finds herself having the most fun when with Gaston (35) whom she regards as an older brother. But Gigi, shows disdain for such trivial love that a man and his mistress usually has. To Alicia, love is an art, and a necessary accomplishment for Gigi's social and economic future. Following the family tradition, Madame Alvarez sends Gigi to her sister, Great Aunt Alicia, to be groomed as a courtesan and learn etiquette and charm. The one thing Gaston truly enjoys is spending time with Madame Alvarez, whom he calls Mamita, and especially her granddaughter, the precocious, carefree Gilberte, aka Gigi who is 15. But in Paris, those who will not marry are usually men, and those who do not marry are usually women." So marriage is not the only option for wealthy young bon vivants like his nephew Gaston, who is bored with life. There are some who will not marry, and some who do not marry. A charming old roué, he cynically remarks that "Like everywhere else, most people in Paris get married, but not all.

Set in turn-of-the-20th century Paris, the film opens with Honoré Lachaille among high society in the Bois de Boulogne.
