Naples suffered a significant loss of political and economic power following Italian unification, a decline seemingly echoed by the collapse of its opera buffa tradition. Yet Naples played a central role in generating an Italian operetta tradition across entertainment venues both old and new, with canzone napoletana becoming a key feature of operettas composed (and performed) across Italy. This article explores the crucial contribution of Naples and the Neapolitan song tradition to the development of Italian operetta, focusing particularly on composer Mario Costa. Neapolitan operetta, I argue, reveals the complex interplay between regional, national and international practices and discourses in constructions of ‘native’ Italian operetta, while exposing the generic and aesthetic ambiguity of Italian operetta within shifting hierarchies and changing repertoires c.1900. At the same time, the study of key figures such as Costa can revise and reorientate musical narratives of Liberal Italy that have typically focused on opera, the Giovane Scuola and the North.