ACT I
A group of villagers and pearl fishers gather along the beach to choose a leader and prepare for the yearly pearl harvest. They select Zurga as their king. During their celebration, Nadir—a hunter who grew up in their village—returns after years spent in the forest. When Nadir and Zurga are alone, the two men recall the event that drove them apart. They had once fallen in love with the same woman, but in order to preserve their friendship, they swore not to pursue her. Reliving the event once again, they vow to be friends until death and to allow the experience to bond their friendship.
A villager returns with the news that a boat has landed nearby. Zurga explains that an unknown woman from a far-off island has been chosen to pray over the divers to protect them from storms and ward off evil spirits. The veiled woman arrives, escorted by the high priest, Nourabad. Zurga tells her that her faithful obedience will be rewarded, but if she breaks her vows of celibacy and solitude, the punishment is death.
The priestess ascends the rock overlooking the sea to begin her vigil. As she prays, Nadir hears her voice and recognizes her as Leila, the woman who had enchanted both him and Zurga years ago. Alone, Nadir confesses that he has long dreamt of Leila and that he had followed her in the past. Leila's incantation to God is interrupted by Nadir's voice and her hymn is transformed into a song of overflowing joy.
ACT II
At the ancient temple, Nourabad reminds Leila that if she remains true to her oaths, she need not fear for her safety. Leila tells Nourabad that she has always remained faithful, even in the face of danger. As a young girl, she once offered sanctuary to a fugitive, and although her life was threatened, she refused to divulge his hiding place. The fugitive thanked her with the necklace that she still wears.
The priest leaves Leila alone and terrified in the lonely mountain temple. Finally, she sleeps.
Nadir climbs the rocks and wakes her. She warns him that if they are seen together, they will be put to death. Shouts are heard. The angry villagers and priests apprehend Nadir and prepare to sacrifice both him and the priestess. Zurga stops the men, crying that it is he who decides who can he punished and when. He orders that their lives be spared, and he whispers to them to leave at once. Nourabad rips off Leila's veil, and Zurga recognizes her as the woman that he and Nadir had forsworn. Nadir has betrayed him He condemns them both to death, but before they can be sacrificed, a terrible storm strikes and everyone prays to Brahma for aid and safety.
ACT III
Zurga despairs at the prospect of killing Nadir. He has been his closest friend, and Zurga has now condemned him to death for loving the woman he himself so desperately loves. Leila enters Zurga's tent and begs for him to save Nadir. She tells him that she is to blame for their forbidden love. When Zurga sees how much she loves Nadir, he is enraged and is strengthened in his resolve to kill his friend.
Nourabad arrives to take Leila to her death. As she is led away, Leila gives her necklace to one of the villagers, asking him to take it to her mother when she is dead. After Leila is gone, Zurga recognizes the necklace as the same one that he gave to a young girl who saved his life many years ago.
The villagers prepare to kill Leila and Nadir at the breaking of the dawn. As the villagers sing and dance in bloodthirsty anticipation, Nadir prays that he may save Leila. She is led in by Nourabad, and together Leila and Nadir prepare for death. As a red glow appears in the distance, Zurga enters, crying our that the village is on fire. As the villagers run out in confusion, Zurga tells Nadir and Leila that he set the fire so that he could free them and repay his debt to Leila. The lovers escape, and Zurga listens to them sing of their happiness as he faces his destiny.