The play opens with Rosencrantz and Guildenstern betting on coin flips. Rosencrantz, who bets heads each time, wins ninety-two flips in a row. The extreme unlikeliness of this event according to the laws of probability leads Guildenstern to suggest that they may be "within un-, sub- or supernatural forces". The audience learns why they are where they are: the King has sent for them. Guildenstern theorizes on the nature of reality, focusing on how an event becomes increasingly real as more people witness it.
A troupe of Tragedians arrives and offers the two men a show. They seem capable only of performances involving bloodbaths. The next two scenes are from the plot of Hamlet. The first, involving Hamlet and Ophelia, takes place off-stage in the Shakespeare (the stage directions repeat exactly the words in which Ophelia, in the original, describes the event to Polonius). The second is taken directly from Hamlet, and is Rosencrantz and Guildenstern's first appearance in that play. Here the Danish king and queen, Claudius and Gertrude, ask the two to discover the nature of Hamlet's recent madness. The royal couple demonstrate an inability to distinguish the two courtiers from one another, as indeed do the characters themselves to their irritation.
Rosencrantz and Guildenstern attempt to practise for their meeting with the Prince by one pretending to be Hamlet and the other asking him questions, but they glean no new information from it. The act closes with another scene from Hamlet in which they finally meet the Prince face to face.
The act opens with the end of the conversation between Rosencrantz, Guildenstern, and Hamlet. Guildenstern tries to look on the bright side, while Rosencrantz makes it clear that the pair had made no progress, that Hamlet had entirely outwitted them.
The Player returns to the stage. He is angry that the pair had not earlier stayed to watch their play because, without an audience, his Tragedians are nothing. He tells them to stop questioning their existence because, upon examination, life appears too chaotic to comprehend. The Player, Rosencrantz, and Guildenstern lose themselves in yet another illogical conversation that demonstrates the limits of language. The Player leaves in order to prepare for his production of the The Murder of Gonzago, set to be put on in front of Hamlet and the King and Queen.
The royal couple enters and begins another short scene taken directly from Hamlet: they ask about the duo's encounter with the Prince, and Rosencrantz and Guildenstern inform them about his interest in the Tragedians' production. After the king and queen leave, the partners contemplate their job. They see Hamlet walk by but fail to seize the opportunity to interrogate him.
The Tragedians return and perform their dress rehearsal of The Murder of Gonzago. The play moves beyond the scope of what the reader sees in Hamlet; characters resembling Rosencrantz and Guildenstern are seen taking a sea voyage and meeting their deaths at the hands of English courtiers, foreshadowing their true fate. Rosencrantz does not quite make the connection, but Guildenstern is frightened into a verbal attack on the Tragedians' inability to capture the real essence of death. The stage becomes dark.
When the stage is once again visible, Rosencrantz and Guildenstern lie in the same position as had the actors portraying their deaths. The partners are upset that they have become the pawns of the royal couple. Claudius enters again and tells them to find where Hamlet has hidden Polonius' corpse. After many false starts they eventually find Hamlet, who leaves with the King.
Rosencrantz is delighted to find that his mission is complete, but Guildenstern knows it is not over. Hamlet enters, speaking with a Norwegian soldier. Rosencrantz decides that he is happy to accompany Hamlet to England because it means freedom from the orders of the Danish court. Guildenstern understands that wherever they go, they are still trapped in this world.
Rosencrantz and Guildenstern find themselves on a ship that has already set sail. The audience is led to believe that the pair has no knowledge of how they got there. At first, they try to determine whether they are still alive. Eventually, they recognize that they are not dead and are on board a boat. They remember that Claudius had given them a letter to deliver to England. After some brief confusion over who actually has the letter, they find it and end up opening it. They realize that Claudius has asked for Hamlet to be killed. While Rosencrantz seems hesitant to follow their orders now, Guildenstern convinces him that they are not worthy of interfering with fate and with the plans of kings. The stage becomes black and, presumably, the characters go to sleep. Hamlet switches the letter with one he has written himself, an act which takes place off stage in Hamlet.
The pair discovers that the Tragedians are hidden ('impossibly', according to the stage directions) in several barrels on deck. They are fleeing Denmark, because their play has offended Claudius. When Rosencrantz complains that there is not enough action, pirates attack. Hamlet, Rosencrantz, and Guildenstern and the Player all hide in separate barrels. The lights dim.
When the lights come on again, Hamlet has vanished (in Hamlet it is reported that he was kidnapped by pirates from the ship). Rosencrantz and Guildenstern panic, and re-read the letter to find that it now calls for them to be put to death instead of the prince. Guildenstern cannot understand why he and Rosencrantz are so important as to necessitate their executions.
The Player tells Guildenstern that all paths end in death. Guildenstern snaps and draws the Player's dagger from his belt, shouting at him that his portrayals of death do not do justice to the real thing. He stabs the Player and the Player appears to die. Guildenstern honestly believes he has killed the Player. Seconds later, the Tragedians begin to clap and the Player stands up and brushes himself off, revealing the knife to be a theatrical one with a retractable blade. The Tragedians then act out the deaths from the final scene of Hamlet.
The lighting shifts so that Rosencrantz and Guildenstern are the only ones visible. Rosencrantz still does not understand why they must die. Still, he resigns himself to his fate and his character disappears. Guildenstern wonders when he passed the point where he could have stopped the series of events that has brought him to this point. He disappears as well. The final scene features the last few lines from Shakespeare's Hamlet, as the Ambassador from England announces that Rosencrantz and Guildenstern are dead.