The novella centers on a slave rebellion on board a Spanish merchant ship in 1799 and, because of its ambiguity, has been read by some as racist and pro-slavery and by others as anti-racist and abolitionist (Newman 1986). When it was published in 1855, it was certainly understood as a commentary on race and the republic. It was published in Putnam's Monthly Magazine around the same time that DeBow's Review, a "virulently pro-slavery" magazine, denounced Putnam's as "the leading review of the Black Republican party."  Literary historian Andrew Delbanco writes that, at that time, Putnam's "was becoming increasingly belligerent on the slavery issue" (230). However, by the mid-20th century, at least some critics read Benito Cereno as a tale that primarily explores human depravity and does not reflect upon race at all / Melville's most recent biographer, Andrew Delbanco, emphasizes the topicality of Benito Cereno in a post-September 11th world: "In our own time of terror and torture, Benito Cereno has emerged as the most salient of Melville's works: a tale of desperate men in the grip of a vengeful fury that those whom they hate cannot begin to understand". The narrative is divided into two parts: the narrative of Captain Delano's encounter with the San Dominick, and the concluding legal depositions of the Europeans who survived the rebellion.
The primary source for the plot, as well as some of the text, was Amasa Delano's Narrative of Voyages and Travels, in the Northern and Southern Hemispheres, chapter 18 (1817), though Benito Cereno contains crucial changes and expansions that make it a very different text. The most transformative change lies in the narrator, or rather in the way in which the tale is told.
The crucial information that the slaves have murdered all the senior Spanish seamen except the captain Benito Cereno is withheld from the reader. The Spanish sailors, and specifically Cereno, are forced to play along in a theatrical performance for the benefit of the American Amasa Delano who initially approaches the dilapidated Spanish ship to offer his assistance. Though written in the third person, the narrative emerges largely through the point of view of Delano throughout the first and longest part of the narrative and therefore remains limited to what Delano sees (or thinks he sees).
Delano represents a version of New England innocence which has also been read as strategy to ensure colonial power over both Spain and Africans in the "New World".  Babo, who plays the faithful body servant to the Spanish captain (representing European aristocracy), is the mastermind behind both the revolt and the subsequent subterfuge. The enslaved Africans have ruthlessly killed their "owner", Alexandro Aranda, and other key officers on the ship to force the captain and the remaining crew to take them back to Africa.
To some earlier critics, Babo represented evil, but more recent criticism has moved to reading Babo as the heroic leader of a slave rebellion whose tragic failure does not diminish the genius of the rebels. In an inversion of contemporary racial stereotypes, Babo is portrayed as a physically weak man of great intellect, his head (impaled on a spike at the end of the story) a "hive of subtlety". In contrast, the supposedly civilized American Delano is duped by Babo and his comrades for the duration of the novella, only defeating him and rescuing the distraught Cereno through brute strength and extreme violence.