Alice's second marriage, to Prince Albert I of Monaco, Sovereign Prince of Monaco, occurred on October 30, 1889. The prince, whose first wife had been a daughter of a Scottish Duke, was an oceanographer and during his long journeys at sea, Alice took great interest in the Monegasque opera season. The courtesan Caroline Otero, La Belle Otero, who had been a part-time lover of the Prince between 1893 and 1897, recalled the Prince fondly in her memoires and claimed that he wasn't a virile man and suffered from erection difficulty.
She brought a strong business acumen, showing an understanding far beyond her years. Having helped put her husband's principality on a sound financial footing, she would devote her energies to making Monaco one of Europe's great cultural centers with its opera, theater, and the ballet under the direction of the famed Russian impresario, Sergei Diaghilev. Her affair with composer Isidore de Lara resulted in Prince Albert slapping her in view of an audience at the Salle Garnier.
The Prince and Princess of Monaco separated judicially on May 30, 1902 (Monaco) and June 3, 1902 (France), but remained married. Upon the Prince's death 20 years later, Alice became the Dowager Princess of Monaco. She did not remarry.