The play spans only the last two years of Richard's life, from 1398 to 1400. The first Act begins with King Richard sitting majestically on his throne in full state, having been requested that he arbitrate a dispute between Thomas Mowbray and Richard's cousin, Henry Bolingbroke, who has accused Mowbray of squandering money given to him by Richard for the King's soldiers and of murdering his uncle, the Duke of Gloucester. Bolingbroke's father, John of Gaunt, meanwhile, believes it was Richard himself who was responsible for his brother's murder. After several attempts to calm both men, Richard acquiesces and Bolingbroke and Mowbray challenge each other to a duel, over the objections of both Richard and Gaunt.
The tournament scene is very formal with a long, ceremonial introduction, but as the combatants begin to fight, Richard interrupts and sentences both to banishment from England. Bolingbroke is originally sentenced to leave for ten years, but Richard changes this to six years, while Mowbray is banished permanently. The king's decision can be seen as the first mistake in a series leading eventually to his overthrow and death, since it is an error which highlights many of his character flaws, displaying as it does indecisiveness (both in terms of whether to allow the duel to go ahead and in terms of how long to exile Bolingbroke for), abruptness (Richard waits until the last possible moment to cancel the duel), and arbitrariness (there is no apparent reason why Bolingbroke should be allowed to return and Mowbray not). In addition, the decision fails to dispel the suspicions surrounding Richard's involvement in the death of the Duke of Gloucester - in fact, by handling the situation so high-handedly and offering no coherent explanation for his reasoning, Richard only manages to appear more guilty. Mowbray predicts that the king will sooner or later fall at the hands of Bolingbroke.
John of Gaunt dies and Richard II seizes all of his land and money. This angers the nobility, who accuse Richard of wasting England's money, of taking Gaunt's money (belonging by rights to his son, Bolingbroke) to fund war in Ireland, of taxing the commoners, and of fining the nobles for crimes committed by their ancestors. They then help Bolingbroke secretly return to England in a plan to overthrow Richard II. There remain, however, subjects who continue faithful to the King, among them Bushy, Bagot, Green and the Duke of Aumerle (son of the Duke of York), cousin of both Richard and Bolingbroke. When King Richard leaves England to administer the war in Ireland, Bolingbroke seizes the opportunity to assemble an army and invades the north coast of England. Executing both Bushy and Green, he wins over the Duke of York, whom Richard has left in charge of his government in his absence.
Upon Richard's return, Bolingbroke not only reclaims his lands but lays claim to the very throne. Crowning himself King Henry IV, he has Richard taken prisoner to the castle of Pomfret. Aumerle and others plan a rebellion against the new king, but York discovers his son's treachery and reveals it to Henry, who spares Aumerle as a result of the intercession of the Duchess of York while executing the other conspirators. After interpreting King Henry's "living fear" as a reference to the still-living Richard, an ambitious nobleman (Exton) goes to the prison and murders him. King Henry repudiates the murderer and vows to journey to Jerusalem to cleanse himself of his part in Richard's death.