The play begins on a ship, with a ship-master and a boatswain trying to keep the ship from wrecking in a tempest. Alonso, King of Naples, is on board, as are his brothers Antonio and Sebastian. Alonso comes above deck merely to give the mariners an unnecessary order; the boatswain begs the nobles to keep below deck during the storm, so that the men can do their jobs without distraction. However, Antonio and Sebastian take the opportunity to make rude and sarcastic remarks to the good boatswain, and can do nothing to help. A spell comes over all on board, and the mariners all flee in desperation; the nobles on deck decide that all is lost without the sailors, and go below deck to say goodbye to their king.
Miranda and Prospero are revealed on the island; Miranda laments that a shipful of men must have died in the tempest, but her father reassures her that none were hurt, and that the tempest was of his own doing. Upon Miranda's request, Prospero begins to tell her of his history, and how they came upon the island; Miranda was very young when she left the island, and cannot remember anyone but her father, not even her dead mother. Prospero tells her how his kingdom was usurped by his brother Antonio, while Prospero was distracted by his studies, and how the king of Naples supported Antonio's rule. Antonio then cast Prospero and Miranda out of Milan, and ordered both of them killed; however, Prospero tells his daughter how the good councilor Gonzalo arranged for them not to be killed, which led to their landing on the island.
Prospero declares his intention of reclaiming his dukedom, and that the tempest and his brothers' shipwreck on the island are part of this plan. Ariel makes his first entrance, and declares that Prospero's bidding has been perfectly performed, and none of the party are harmed; the sailors are still upon the ship, while the King and his companions have been scattered about the island. Ariel reminds Prospero of his promise to free Ariel, and Prospero impresses upon him how much more generous a master he believes himself to be than Sycorax.
Caliban enters, stating his claim to the island that comes through his mother Sycorax; Prospero's teachings, for whatever reason, have failed upon Caliban, and Caliban retains his more primitive nature, for which Prospero and Miranda despise him. Ferdinand stumbles upon Miranda, and they immediately fall in love, due to Ariel's magic; but Prospero decides to make him a servant, and will put him to hard tasks about the island.
King Alonso has landed on the island, with his brothers Sebastian and Antonio, noblemen Adrian and Francisco, and the councilor Gonzalo. Gonzalo tries to console Alonso upon their good fortune of surviving the shipwreck - but Alonso is grieved - not only because his son Ferdinand is missing and presumed dead, but because he was returning from his daughter's wedding in Africa, and fears he will never see her again because of the distance. Antonio and Sebastian show great skill with mocking wordplay, and use this skill to stifle Gonzalo and Adrian's attempts to speak frankly to the rest of the party. Ariel's magic makes the party fall asleep, with the exception of Antonio and Sebastian.
A strange seriousness, of Ariel's doing, falls upon Antonio and Sebastian. Antonio begins to concoct a plan to get his brother the kingship, which will be much easier if Ferdinand, the current heir, really is dead; and since Alonso's daughter is very far away in Tunis, Sebastian might be able to inherit the crown with only two murders, those of Alonso and Gonzalo. Ariel, however, hears to conspirators plan, and wakes Gonzalo with a warning of the danger he is in. Ariel intends to let Prospero know that the conspiracy has indeed been formed as he wished, and Prospero in turn will try to keep Gonzalo safe, out of appreciation for his past help in preserving the lives of Prospero and Miranda.
Caliban curses Prospero, as another storm approaches the island; he takes the storm as a sign that Prospero is up to mischief, and hides at the approach of what he fears is one of Prospero's punishing spirits. Trinculo, Alonso's court jester, finds Caliban lying still on the ground and covered with a cloak, and figures him to be a "dead Indian"; but, the storm continues to approach, so he also hides himself, using Caliban's cloak as a shelter, and flattening himself on the ground beside Caliban's prostrate form.
Alonso's drunken butler, Stephano, enters, drunk and singing, and stumbles upon the strange sight of the two men under the cloak; he figures, in his drunken stupor, that Trinculo and Caliban make a four-legged monster. Caliban,in his delirium, thinks that Stephano is one of Prospero's minions, sent to torment him; Stephano thinks a drink of wine will cure Caliban of what ails him, and bit by bit, gets Caliban drunk as well. It takes Stephano a while to recognize his old friend, Trinculo, whom Caliban seems to be ignoring. Because of Stephano's generosity with his "celestial liquor," Caliban takes him to be some sort of benevolent god; much to Trinculo's disbelief, Caliban actually offers his service to Stephano, forsaking the "tyrant" Prospero. Stephano accepts the offer.
Ferdinand has been made to take Caliban's place as a servant, despite his royal status; and though he does not like Prospero, he does the work because it will benefit his new love, Miranda. Ferdinand and Miranda express their love for each other, and both express their desire to be married - though they have known each other for less than a day.
Stephano, Trinculo, and Caliban are drinking; Trinculo and Sebastian continue to insult Caliban, though Caliban only protests against Trinculo's remarks, and tries to get Stephano to defend him. Caliban begins to tell the other two about the tyranny of his old master, Prospero, and how he wants to be rid of Prospero forever; Ariel enters, causes further discord among the group, and gets Caliban to form a murder plot against Prospero. Caliban promises Stephano that if Prospero is successfully killed, he will allow Stephano to be ruler of the island, and will be his servant. He also promises that Stephano will get Miranda if the plot is successful - Ariel leaves, to tell Prospero of these developments.
Alonso, Adrian, Francisco, Sebastian, Antonio, and Gonzalo are still wandering about the island, and Alonzo has finally given up any hope of his son Ferdinand being alive. Antonio and Sebastian decide to make their murderous move later that night, but their conspiracy is interrupted by Prospero sending in a huge banquet via his spirits, with he himself there, but invisible. They are all amazed, but not too taken aback that they will not eat the food; but, as they are about to eat, a vengeful Ariel enters, taking credit for their shipwreck, and makes the banquet vanish. Alonso recognizes Ariel's words as being of Prospero's pen, and the great guilt of Alonso, Antonio, and Sebastian begins to take them over, at the thought of Prospero being alive, and so nearby.
Prospero stops Ferdinand's punishment, and decides to finally give Miranda to him, since he has proven his love for her through his service. Prospero accepts the union, but issues them a warning; if Ferdinand takes Miranda's virginity before a ceremony can be performed, then their union will be cursed. Ferdinand swears to Prospero that they shall wait until the ceremony to consummate their marriage, and then Prospero calls upon Ariel to perform one of his last acts of magic. A betrothal masque is performed for the party by some of Prospero's magical spirits; Juno, Ceres, and Iris are the goddesses who are represented within the masque, and the play speaks about the bounties of a good marriage, and blesses the happy couple. This act of magic so captivates Prospero that he forgets Caliban's plot to kill him; for a moment, he almost loses control, but manages to pull himself out of his reverie and take action.
Caliban, Stephano, and Trinculo come looking for Prospero, and swipe a few garments of Prospero's on their way. Caliban still wants very much to kill Prospero, and carry out this plot; however, Trinculo and Stephano are very drunk, as usual, and prove completely incapable of anything but petty theft. Prospero catches them - not difficult, since they are making a huge amount of noise--and sends Ariel after them as they flee.
Prospero finally has all under his control; Ariel has apprehended Alonso, Sebastian, and Antonio, and they are all waiting for Prospero's judgment. Finally, Prospero makes up his mind against revenge, and makes a speech that signifies his renunciation of magic; the accused and the other nobles enter the magic circle that Prospero has made, and stand there, enchanted, while he speaks. Prospero charges Alonso with throwing Prospero and his daughter out of Italy, and Antonio and Sebastian with being part of this crime. Prospero announces Ariel's freedom after Ariel sees the party back to Naples, and Ariel sings a song out of joy. Alonso and Prospero are reconciled after Alonso declares his remorse and repents his wrongs to Prospero and Miranda, and Prospero finally wins back his dukedom from Antonio. Prospero, perhaps unwillingly, also says that he forgives Antonio and Sebastian, though he calls them "wicked" and expresses his reservations about letting them off the hook.
After despairing that his son is dead, Alonso finds out that his son Ferdinand is indeed alive, and the two are reunited; then, Ferdinand and Miranda's engagement is announced, and is approved before the whole party by Alonso and Prospero. Gonzalo rejoices that on the voyage, such a good match was made, and that the brothers are reunited, and some of the bad blood between them is now flushed out. Ariel has readied Alonso's boat for their departure, and the boatswain shows up again, telling them about what happened to all of the sailors during the tempest.
Caliban apologizes to Prospero for taking the foolish Stephano as his master, and Prospero, at last, acknowledges Caliban, and takes him as his own. Stephano, Trinculo, and Caliban's plot is exposed to the whole group, and is immediately forgiven. Prospero invites everyone to pass one last night in the island at his dwelling, and promises to tell the story of his and Miranda's survival, and of the devices of his magic. The play ends with Prospero addressing the audience, telling them that they hold an even greater power than Prospero the character, and can decide what happens next.