The Christian king, Dom Sébastian, leaves his uncle Dom Antonio to rule Portugal while he goes on a crusade against the Moors of Africa. Sébastian's entourage includes the idealistic poet Camoëns and the Moor princess Zayda, whom he had rescued from being burnt at stake for trying to escape the monastery she had resided in since her conversion to Christianity (O mon Dieu, sur la terre). He intends to return her to her father Ben-Selim.
The reunion between Zayda and Ben-Selim is dampened by her refusal to marry the Moorish chief Abayaldos.
A battlefield in Morocco
Abayaldos has led the Moors to battle against Sébastian's forces and mostly wiped them out. The wounded Sébastian's life is saved only when his lieutenant Dom Henrique presents himself to Abayaldos as Sébastian, before expiring from his own wounds, and Zayda pleads for "the Christian's" life (the real Sébastian) in return for her consent to marry Abayaldos, reasoning that her life was saved by a Christian during her captivity in Portugal and that the favor must be returned. Sébastian is left on the battlefield a broken man (Seul sur la terre).
A public square, Lisbon
Camoëns has survived the battle and returned to Lisbon (O Lisbonne, o ma patrie!) where he learns that Antonio has aligned himself with the Spanish Grand Inquisitor Dom Juan de Sylva and usurped the throne. He runs into Sébastian, just as the funeral procession for the supposedly dead king passes by. Camoëns causes a commotion in his outrage, and Sébastian is recognized by the people when he intervenes. Abayaldos, for his part, recognizes the lowly "Christian" whose life he had spared. Sébastian is jailed as an imposter.
A court of law, Lisbon
At Sébastian's trial, Zayda proves her love for him by testifying to his true identity and how he escaped death. Abayaldos accuses her of infidelity, and now both Sébastian and Zayda are jailed, she for treason.
The Lisbon Court
Eager to legitimize his deal with Spain, Antonio offers to spare Sébastian's life if Zayda can convince Sébastian to sign the official instrument selling Portugal to Spain. After first refusing, Sébastian signs. Free but distraught, Zayda runs out to drown herself.
A tower guarding the entrance to Lisbon Harbor (anachronistically the Belém Tower, symbol of Portuguese independence)
Sébastian catches up with Zayda at the top of the tower. They see Camoëns in a boat attempting to rescue them. Sébastian and Zayda climb down a rope to the boat but are discovered half way down; they plunge to their deaths when the rope is slashed. Camoëns is killed by gunfire and, at curtain, the Spanish fleet emerges on the horizon. Portugal has lost her independence.