The marquis bids his daughter Leonora an affectionate goodnight, assuring her that the country air will help her to forget the unworthy stranger (who has aspired to her hand). Leonora, on the point of eloping with Don Alvaro, the stranger, is seized with remorse, thinking mournfully of her life when parted forever from her country and her family, while her maid Curra tries to encourage her to pack, warning her of the fate which attends Alvaro if she were to yield to the temptation of confessing to her father.
When Alvaro arrives, she is still reluctant to leave, asking him to delay by one day, so she can see her father again; but when Alvaro accuses her of not loving him, she responds to his passion and prepares to elope. But they are surprised by the Marquis and servants. Swearing that Leonora is pure, Alvaro offers his breast to the Marquis, who disdains to kill one he considers beneath him. Alvaro throws his pistol to the floor and it goes off, killing the Marquis, who dies cursing his daughter. Leonora and Alvaro flee.
Arriving at the inn disguised as a man, Leonora hides when she sees her brother, Don Carlo, among the crowd waiting for supper. Don Carlo, disguised as a student, begins to interrogate the muleteer Trabuco about the identity of the person he brought to the inn (Leonora), but is interrupted by the arrival of the gipsy Preziosilla on her way to join the Spanish army fighting in Italy. After a rousing call to arms, she offers to tell fortunes, and sees misfortune in Carlo's hand, and also makes it clear that she knows he is not what he says he is.
A procession of pilgrims passes on its way to the monastery of Hornachuelos and the company joins in the prayer. Carlo continues to question Trabuco about the sex of the traveller, and even suggests painting a moustache on his face as he sleeps, until restrained by the mayor, who asks him to account for himself. His name is Pereda, he answers, a student from Salamanca, who had accompanied his friend Don Carlo di Vargas in search of his sister and her foreign lover who had killed their father; Carlo has gone to (South) America and he will return to his studies. All go to bed.
Leonora reaches her goal, the monastery, terrified to have recognised her brother and heard him tell her story. She also heard him say that Don Alvaro, whom she had thought killed in the confusion on the night of the failed elopement, is alive and has gone to South America; and believes that he has deserted her. She rings the bell and manages to convince the reluctant porter, brother Melitone, of her urgent need to see the Padre Guardiano.
To the Padre Guardiano she reveals her identity. She had been sent to him by her confessor, as she wishes to follow the example of another woman and live as a hermit in a cave not far from the monastery. After some reluctance, he consents and calls the monks to prayer, to give her his blessing and state to her and the brothers (who do not know she is a woman) the conditions of her future life: she is to see no one and remain undisturbed; he will leave food for her and only in extreme danger or at the hour of her death is she to ring a bell to summon him.
As soldiers carouse in the background, Don Alvaro reveals in a soliloquy that he is the son of a Spaniard who had married the daughter of the last of the Incas and tried to free Peru from Spanish rule. His parents had been defeated, put in prison, where Alvaro was born, and executed, while he was brought up in the wilderness. Unaware that Leonora is still alive, he prays to her to look down on him from heaven.
Disturbed by sounds of quarrelling and a cry for help, he rescues Don Carlo from the consequences of a quarrel over a game of cards. Excusing himself for being in such low company, on the grounds that he is but recently arrived, Carlo identifies himself as Don Felice de Bornos, aide-de-camp to the general, and Alvaro gives in reply the name he has assumed, Don Federico, Herreros, captain of grenadiers and, as Carlo exclaims in delight, the pride of the army. The two swear eternal friendship and go into battle together.
Alvaro is wounded and Carlo exhorts the surgeon to save him, promising Alvaro the order of Calatrava for his bravery. Feeling death near, Alvaro begs Carlo to burn unopened a packet of documents he will find among his possessions, and Carlo swears to obey; but while the surgeon is operating, doubts occur, spurred by Alvaro's horrified reaction to the name of Calatrava. He is tempted to open the packet, but his sense of honor restrains him. But near the packet he finds a portrait of Leonora and his suspicions are confirmed, and he receives with joy the news that Alvaro will live - so that he can kill him.
The sun rises on bustling camp activity. Among those present is Preziosilla, telling fortunes, Trabuco, trafficking with the soldiers, and Melitone, reproving everyone for pagan goings-on on Sunday. When the soldiers turn on him, Preziosilla averts their wrath by embarking on a rousing rataplan.
Brother Melitone is dispensing food to the poor, complaining as he does so, so that they compare him unfavourably with the charitable Father Raffaele. When they have gone he discusses Father Raffaele with the Father Superior, explaining that he seems more like the devil than a member of a monastic order.
Don Carlo knocks at the gate asking for Father Raffaele (Alvaro) and when they are alone confronts him, wishing to resume the interrupted duel - he has even brought two swords. But Alvaro has withdrawn from the world and tries to avoid the conflict. Rising to Carlo's taunt on his ancestry, he gains control of himself, but a blow cannot be overlooked and they run off to fight to the death.
Leonora, dressed as a hermit, appears from the cave, praying for peace of mind: she has been unable to forget Don Alvaro.
The sound of fighting disturbs her and she calls an imprecation on the heads of those disturbing her holy refuge. But the voice of the dying Carlo is heard calling for confession and Alvaro comes to beg the hermit to give him the last rites. They recognise one another and Alvaro tells her her brother lies dying. She goes to him, but he stabs her as he dies.
As she reappears, supported by the Padre Guardiano, Alvaro curses his fate and heaven, but is reproved by the Padre Guardiano, and Leonora assures him that heaven will pardon him. As she dies, Alvaro laments that he, the guilty one, lives on.