Prospero, a sorcerer and the rightful Duke of Milan, dwells on an enchanted isle with his daughter, Miranda. Twelve years earlier, the duke's brother, Antonio, and Alonso, the King of Naples, conspired to usurp his throne. They set Prospero and Miranda adrift in a boat, and they eventually found themselves marooned on the island. Prospero is served on his island by Ariel, a spirit who he freed from a tree with magic, and Caliban, son of the witch Sycorax. When magic reveals that a ship bearing his old enemies is sailing near the island, Prospero summons a storm to wreck their ship. The survivors make it to shore in scattered groups. Among these is Ferdinand, the son of Alonso. He is lulled to Prospero's abode by the singing of Ariel; there he meets Miranda, who is enthralled with the young prince.

Meanwhile, Antonio, Alonso, Sebastian, and Gonzalo wander the island in search of Ferdinand. Antonio now plots with Sebastian to murder Alonso, but this plot is thwarted by Ariel. Elsewhere on the island, Stephano and Trinculo encounter Caliban. After sharing a few drinks, Caliban tries to enlist the two in a plot to kill Prospero and rule the island himself. He even promises Miranda to Stephano. Ariel, however, reports all these goings-on to Prospero. In the meantime, Miranda and Ferdinand pledge their troth to each other.

Prospero isn't finished with his sport of Antonio and Alonso, either. He creates a magical banquet for the two men that vanishes whenever they try to eat. He also sends Ariel in the guise of a harpy to hound them for their crimes against Prospero. Later, at a masque to celebrate the upcoming marriage of Miranda and Ferdinand, Prospero remembers Caliban's plot and abruptly calls the revels to a halt. He sends Ariel to punish them as well; the spirit does so by first luring them with some fancy clothes, then setting other island spirits upon them in the shape of hunting dogs that chase them around the island.

Finally, Prospero confronts his brother and Alonso, revealing his true identity as the rightful Duke of Milan. He demands that Antonio restore his throne; he also rebukes Sebastian for plotting against his own brother. To Alonso, he reveals Ferdinand alive and well, playing chess with Miranda. As a final act, Prospero abandons his magic and releases Ariel and Caliban from their servitude. From Ariel, Prospero asks for one last boon: calm seas and favorable winds for their trip back to Naples.