The song begins in a bright, cheery, and perhaps innocently sinister manner, with all people dancing and swirling about in costumes. The lyrics, though, reveal that there is something strange about the song. They describe the power of masks and their ability to conceal one's persona, which may seem like a game—but the words reveal the dangerous side of hiding away. As the revelers sing, "You can fool any friend who ever knew you!" Indeed, Firmin and Andre begin the song by tentatively approaching one another in skeleton costumes, uncertainly whispering one another's names and only breaking into a self-congratulatory conversation once they have established their identities.
The song also acts a strange parallel to the Phantom himself. The lyrics of the song boldly state:
This mirrors not only the fact that the Phantom wears a mask to conceal his disfigured face, but also the fact that he hides himself away from the world. By turning his daily practice into a fun but dark game for the patrons and workers of the opera, the song suggests that all social interaction requires one to metaphorically conceal oneself. One can only enjoy perfect liberty while in disguise. This is driven home when the Phantom disrupts the song by arriving in an elaborate Red Death costume and mask, bullies and taunts the managers and wrenches the chain Christine wears her engagement ring on from around her neck.
Masquerade! Paper faces on parade... Masquerade! Hide your face so the world will never find you...
It should also be noted that "bal masques" were popular middle-class entertainments held at the Palais Garnier and elsewhere throughout the latter quarter of the nineteenth century, and did not necessarily have any connection to other events or performances at the Opera.
"Masquerade" is usually viewed as the show's theme (alongside the "Phantom of the Opera" melody), mainly because it is the first song that the audience hears throughout the whole play, even before the overture begins. It is the song that plays from the mysterious monkey and barrel organ music box that eventually becomes a symbol of the Phantom's and Christine's love. In the play's final scenes, the Phantom, unmasked, observes the music box in his lair. It comes to life by magic, and tinkles out its tune across a vast, silent stage. The Phantom sings the lines quoted above while staring at his mask, reflecting on his life of hiding away and perhaps on his impending need to secure himself from his pursuers. He finally whispers, "Christine...I love you...," echoing Raoul's identical declaration several scenes before, before preparing to disappear. Perhaps significantly, he leaves his mask on his chair.