Vincentio, the Duke of Vienna, makes it known that he intends to leave the city on a diplomatic mission. He leaves the government in the hands of a strict judge, Angelo.
In the next scene, we find a group of soldiers on a Vienna street, expressing their hopes, in irreverent banter, that a war with Hungary is afoot, and that they will be able to take part. Mistress Overdone, the operator of a whorehouse frequented by these same soldiers, appears and tells them "there's one yonder arrested and carried to prison was worth five thousand of you all." She tells them that it is "Signor Claudio," and that "within these three days his head to be chopped off" as punishment for "getting Madam Julietta with child." Lucio, one of the soldiers who is later revealed to be Claudio's friend, is astonished at this news and rushes off. Then comes the first appearance of Pompey Bum, a character whom Harold Bloom has described as "a triumph of Shakespeare's art, a vitalistic presence who refuses to be bound by any division between comedy and tragedy." Pompey, who works for Mistress Overdone as a pimp, but disguises his profession by describing himself as a mere 'tapster' (the equivalent of a modern bartender), avers to the imprisonment of Claudio and outrageously explains his crime as "Groping for trouts in a peculiar river." He then informs Mistress Overdone of Angelo's new proclamation, that "All houses [of prostitution] in the suburbs of Vienna must be plucked down." The brothels in the city "shall stand for seed: they had gone down too, but that a wise burgher put in for them." Mistress Overdone is distraught, as her business is in the suburbs. "What shall become of me?" she asks. Pompey replies with a characteristic mixture of bawdy humor and folk-wisdom, "fear you not: good counselors lack no clients: though you change your place, you need not change your trade... Courage! there will be pity taken on you: you that have worn your eyes almost out in the service, you will be considered."
Claudio is then led past Pompey and Overdone on his way to prison, and we learn what has happened to him. Claudio married Juliet, but, as they have not completed all the technicalities, they are still legally unmarried when Juliet gets pregnant. Angelo, as the interim ruler of the city, decides to enforce a law that fornication is punishable by death, so Claudio is sentenced to be executed. Claudio's friend, Lucio, visits Claudio's sister, Isabella, a novice nun, and asks her to intercede with Angelo on Claudio's behalf.
Isabella obtains an audience with Angelo, and pleads for mercy for Claudio. Over the course of two scenes between Angelo and Isabella, it becomes clear that he lusts after her, and he eventually offers her a deal: Angelo will spare Claudio's life if Isabella yields him her virginity. Isabella refuses, but she also realizes that (because of Angelo's austere reputation) she will not be believed if she makes a public accusation against him. Instead, she visits her brother in prison and counsels him to prepare himself for death. Claudio desperately begs Isabella to save his life, but Isabella refuses. As a novice nun, she feels that she cannot sacrifice her own immortal soul (and that of Claudio, if he causes her to lose her virtue) to save Claudio's transient earthly life.
The Duke has not in fact left the city, but remains there disguised as a friar (Lodowick) in order to spy on the city's affairs, and especially on the actions of Angelo. In his guise as a friar, he befriends Isabella and arranges two tricks to thwart Angelo's evil intentions:
- First, a "bed trick" is arranged. Angelo has previously refused to fulfill the betrothal binding him to Mariana, because her dowry had been lost at sea. Isabella sends word to Angelo that she has decided to submit to him, making it a condition of their meeting that it occurs in perfect darkness and in silence. Mariana agrees to take Isabella's place, and she has sex with Angelo, although he continues to believe he has enjoyed Isabella. (In some interpretations of the law, this constitutes consummation of their betrothal, and therefore their marriage. This is the same interpretation that assumes that Claudio and Juliet are legally married.)
- After having sex with Mariana (whom he believes is Isabella), Angelo goes back on his word, sending a message to the prison that he wishes to see Claudio's head, necessitating the "head trick." The Duke first attempts to arrange the execution of another prisoner whose head can be sent instead of Claudio's. However, the villain Barnardine refuses to be executed in his drunken state. As luck would have it, a pirate named Ragozine, of similar appearance to Claudio, has recently died of a fever, so his head is sent to Angelo instead.
This main plot concludes with the 'return' to Vienna of the Duke as himself. Isabella and Mariana publicly petition him, and he hears their claims against Angelo, which Angelo smoothly denies. As the scene develops, it appears that Friar Lodowick will be blamed for the 'false' accusations leveled against Angelo. The Duke leaves Angelo to judge the cause against Lodowick, but returns in disguise moments later when Lodowick is summoned. Eventually, the friar reveals himself to be the Duke, thereby exposing Angelo as a liar and Isabella and Mariana as truthful. He proposes that Angelo be executed but first compels him to marry Mariana— with his estate going to Mariana as her new dowry, "to buy you a better husband." Mariana pleads for Angelo's life, even enlisting the aid of Isabella (who is not yet aware her brother Claudio is still living). The Duke pretends not to heed the women's petition, and—only after revealing that Claudio has not, in fact, been executed—relents. The Duke then proposes marriage to Isabella. Isabella does not reply, and her reaction is interpreted differently in different productions: her silent acceptance of his proposal is the most common in performance. This is one of the "open silences" of the play.
A sub-plot concerns Claudio's friend Lucio, who frequently slanders the duke to the friar, and in the last act slanders the friar to the duke, providing opportunities for comic consternation on Vincentio's part and landing Lucio in trouble when it is revealed that the duke and the friar are one and the same. His punishment, like Angelo's, is to be forced into an undesired marriage: in this case with the prostitute Kate Keepdown.