Rebecca's unrequited love for Ivanhoe forms a sentimental sub-plot.
Wilfred of Ivanhoe is disinherited by his father Cedric of Rotherwood for supporting the Norman King Richard and for falling in love with the Lady Rowena, Cedric's ward and a descendant of the Saxon Kings of England. Cedric had planned to marry her to the powerful Lord Aethelstane, pretender to the Crown of England through his descent from the last Saxon King, Harold Godwinson, thus cementing a Saxon political alliance between two rivals for the same claim. Ivanhoe accompanies King Richard on the Crusades, where he is said to have played a notable role in the Siege of Acre by enduring with great fortitude the privations of life in the city and Christian camp after their containment by Saladin; Ivanhoe also tends to Louis of Thuringia who suffers from malaria.
The book opens with a scene of Norman knights and prelates seeking the hospitality of Cedric. They are guided there by a palmer, who has recently returned from the Holy Land. The same night, seeking refuge from inclement weather and bandits, Isaac of York, a Jewish moneylender, arrives at Rotherwood. Following the night's meal, the palmer observes one of the Normans, the Templar Brian de Bois-Guilbert, issue orders to his Saracen soldiers to follow Isaac of York after he leaves Rotherwood in the morning and take him captive to a noble's castle.
The palmer then warns the moneylender of his peril and assists in his escape from Rotherwood. The swineherd Gurth refuses to open the gates until the palmer whispers a few words in his ear, which turns Gurth as helpful as he was recalcitrant earlier. This is but one of the many mysterious incidents that occur throughout the book.
Isaac of York offers to repay his debt to the palmer by offering him a suit of armour and a war horse to participate in the tournament at Ashby-de-la-Zouch, where he was bound. He makes the offer on his inference that the palmer was in reality a knight, having observed his knight's chain and spurs (a fact that he mentions to the palmer). The palmer is taken by surprise but accepts the offer.
The story then moves to the scene of the tournament, which is presided over by Prince John, King Richard's younger brother. Other characters in attendance are Cedric, Aethelstane, Lady Rowena, Isaac of York, his daughter Rebecca, Robin of Locksley and his men, Prince John's advisor Waldemar Fitzurse, and numerous Norman knights.
On the first day of the tournament, a bout of individual jousting, a mysterious masked knight, identifying himself only as "Desdichado" (which is described in the book as Spanish for the "Disinherited One", though actually meaning "Unfortunate"), makes his appearance and manages to defeat some of the best Norman lances, including Bois-Guilbert, Maurice de Bracy, a leader of a group of "Free Companions" (mercenary knights), and the baron Reginald Front-de-Boeuf. The masked knight declines to reveal himself despite Prince John's request, but is nevertheless declared the champion of the day and is permitted to choose the Queen of the Tournament. He bestows this honour upon the Lady Rowena.
On the second day, which is a melée, Desdichado is chosen to be leader of one party. Most of the leading knights of the realm, however, flock to the opposite standard under which Desdichado's vanquished opponents fought. Desdichado's side is soon hard pressed and he himself beset by multiple foes, when a knight who had until then taken no part in the battle, thus earning the sobriquet Le Noir Faineant (or the Black Sluggard), rides to Desdichado's rescue. The rescuing knight, having evened the odds by his action, then slips away. Though Desdichado was instrumental in the victory, Prince John, being displeased with his behaviour of the previous day, wishes to bestow his accolades on the vanished Black Knight. Since the latter has departed, he is forced to declare Desdichado the champion. At this point, being forced to unmask himself to receive his coronet, Desdichado is revealed to be Wilfred of Ivanhoe himself, returned from the Crusades. This causes much consternation to Prince John and his court who now fear the imminent return of King Richard.
Because he is severely wounded in the competition and because Cedric refuses to have anything to do with him, Ivanhoe is taken into the care of Rebecca, the beautiful daughter of Isaac, who is a skilled healer. She convinces her father to take him with them to York, where he can be best treated. The story then goes over the conclusion of the tournament including feats of archery by Locksley.
Capture and rescue
Meanwhile, de Bracy finds himself infatuated with the Lady Rowena and, with his companions-in-arms, makes plans to abduct her. In the forests between Ashby and York, the Lady Rowena, Cedric, and Aethelstane encounter Isaac, Rebecca, and the wounded Ivanhoe, who had been abandoned by their servants for fear of bandits. The Lady Rowena, in response to the requests of Isaac and Rebecca, urges Cedric to take the group under his protection to York. Cedric, unaware that the wounded man is his son, agrees. En route, the party is captured by de Bracy and his companions and taken to Torquilstone, the castle of Front-de-Boeuf. However, the swineherd Gurth, who had run away from Rotherwood to serve Ivanhoe as squire at the tournament and who was recaptured by Cedric when Ivanhoe was identified, manages to escape.
The Black Knight, having taken refuge for the night in the hut of a local friar, the Holy Clerk of Copmanhurst, volunteers his assistance on learning about the captives from Robin of Locksley, who had come to rouse the friar for an attempt to free them. They then besiege the Castle of Torquilstone with Robin's own men, including the friar and assorted Saxon yeomen whom they had managed to raise due to their hatred of Front-de-Boeuf and his neighbour, Philip de Malvoisin.
At Torquilstone, de Bracy expresses his love for the Lady Rowena, but is refused. In the meantime, Brian de Bois-Guilbert, who had accompanied de Bracy on the raid, takes Rebecca for his captive, and tries to force his attentions on her, which are rebuffed. Front-de-Boeuf, in the meantime, tries to wring a hefty ransom, by torture over a fire, from Isaac of York. However, Isaac refuses to pay a farthing unless his daughter is freed from her Templar captor.
When the besiegers deliver a note to yield up the captives, their Norman captors retort with a message for a priest to administer the Final Sacrament to the captives. It is then that Cedric's jester Wamba slips in disguised as a priest, and takes the place of Cedric, who then escapes and brings important information to the besiegers on the strength of the garrison and its layout.
Then follows an account of the storming of the castle. Front-de-Boeuf is killed while de Bracy surrenders to the Black Knight, who identifies himself as King Richard. Showing mercy, he releases de Bracy. Bois-Guilbert escapes with Rebecca while Isaac is released from his underground dungeon by the Clerk of Copmanhurst. The Lady Rowena is saved by Cedric, while the still-wounded Ivanhoe is rescued from the burning castle by King Richard. In the fighting, Aethelstane is wounded and believed by all to be killed while attempting to rescue Rebecca, whom he mistakes for Rowena.
Rebecca's trial and Ivanhoe's reconciliation
Following the battle, Locksley plays host to King Richard. Word is also conveyed by de Bracy to Prince John of the King's return and the fall of Torquilstone. In the meantime, Bois-Guilbert rushes with his captive to the nearest Templar Preceptory, which is under his friend Albert de Malvoisin, expecting to be able to flee the country. However, Lucas de Beaumanoir, the Grand-Master of the Templars is unexpectedly present there. He takes umbrage at Bois-Guilbert's sinful passion, which is in violation of his Templar vows; and decides to subject Rebecca, who he thinks has cast a spell on Bois-Guilbert, to a trial for witchcraft. She is found guilty through a flawed trial, but claims the right to trial by combat. Bois-Guilbert, who had hoped to fight as her champion incognito, is devastated when the Grand-Master orders him to fight against Rebecca's champion. Rebecca then writes to her father to procure a champion for her.
Meanwhile Cedric organises Aethelstane's funeral at Coningsburgh, in the midst of which the Black Knight arrives with a companion. Cedric, who had not been present at Locksley's carousal, is ill-disposed towards the knight upon learning his true identity. However, King Richard calms Cedric and reconciles him with his son, convincing him to agree to the marriage of Ivanhoe and Rowena. During this conversation, Aethelstane emerges – not dead, but having been laid in his coffin alive by avaricious monks desirous of the funeral money. Over Cedric's renewed protests, Aethelstane pledges his homage to the Norman King Richard and urges Cedric to marry Rowena to Ivanhoe; to which Cedric finally agrees.
Soon after this reconciliation, Ivanhoe receives word from Isaac beseeching him to fight on Rebecca's behalf. Upon arriving at the scene of the witch-burning, Ivanhoe engages Brian de Bois-Guilbert in single combat and goes down along with his mount, but the Templar reels in the saddle and falls from his horse. Ivanhoe recovers to put his foot on Bois-Guilbert's chest but does not kill him. The Templar has suffered a seizure and died "a victim to the violence of his own contending passions," which is pronounced by the Grand Master as the judgement of God and proof of Rebecca's innocence. King Richard, who had left Kyningestun soon after Ivanhoe's departure, arrives at the Templar Preceptory, banishes the Templars and declares that the Malvoisins' lives are forfeit for having aided in the plots against him.
Fearing further persecution, Rebecca and her father leave England for Granada. Before leaving, Rebecca comes to bid Rowena a fond farewell. Finally, Ivanhoe and Rowena marry and live a long and happy life together, though the final paragraphs of the book note that Ivanhoe's long service ended with the death of King Richard.
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