
Setting: A seaside fishing village in Ceylon (Sri Lanka).
Act I
A seashore on Ceylon. A group of fishermen and their families are working on the shore and choose Zurga, a fisherman, as their leader. Zurga's friend, a hunter named Nadir, comes to congratulate Zurga. The two men remember fighting over the beautiful priestess Leïla and how they vowed to save their friendship by never seeing her again.
Accompanied by the high Hindu priest Nourabad, a veiled woman arrives to pray to Brahma for the safety and success of the fisherman. Nadir recognizes the woman as the priestess Leïla. After the priestess and priest enter the temple, Nadir is left alone to remember how much he loved her. The fisherman falls asleep and Leïla returns to the shore. When he awakes, she removes her veil and they sing of their love.
Act II
In front of the Hindu temple. The fishermen have returned to the island safely and Leïla is released from her evening vigil. The priest Nourabad reminds her that she must watch over the men and remember her religious vows. She tells him that she once risked her life to help a fugitive escape, and that the fugitive rewarded her with a necklace she wears to this day.
After Nourabad leaves, Leïla senses Nadir's presence and urges him to appear. She tells him he loves him, but that they can never be together. Nourabad returns unexpectedly and finds the priestess and fisherman together. The priest brings the fisherman to be judged by the village. The priest and villagers say that he must be put to death, but Zurga intervenes. Zurga reminds the villagers that he is the leader and promises to be merciful. Nourabad tears Leïla's veil from her face and Zurga realizes that Nadir has broken the promise never to see the priestess again. Filled with rage, the head fisherman swears revenge.
Act III
Zurga's tent. Zurga begins to regret his rage and jealousy when Leïla comes to beg for Nadir's life. Though Zurga had planned to spare their lives, he becomes jealous upon realizing that Leïla loves Nadir and orders their deaths. As she is led off, Leïla begs Zurga to send her necklace to her mother. Zurga recognizes the necklace and realizes that he is the fugitive Leïla once saved from death.
As Leïla and Nadir are led to the funeral pyre, the villagers are distracted by a red light in the sky. When Zurga declares that the village is on fire, everyone leaves to save their homes. Zurga tells the lovers that he set the fire to distract the villagers and that the necklace Leïla wears once belonged to him. He sets them free to repay the priestess for having saved his life so many years before.
From a hiding place, Nourabad witnesses the lovers' escape. When the villagers return, the priest denounces Zurga and tells the people that their leader let the lovers escape. Zurga climbs onto the pyre and the villagers stare in fear at the blazing forest.