Benito Cereno takes place in 1799. The captain of a sealing ship Bachelor’s Delight, Captain Amasa Delano, spots another ship drifting listlessly towards the bay of Santa Maria. Wondering if the ship may be in distress, Delano boards his whale-boat and sets sail towards the suspicious ship. He learns that the ship is called the San Dominick and meets its captain, Benito Cereno. Upon arrival, Delano is greeted by Spaniards and black men and women who beg him for water and supplies. Delano is troubled by the amount of black people on board since they greatly outnumber the Spaniards. This disparity is explained by the collective cries of those on-board, claiming that they had been hit by a fever that killed more of the Spaniard crew than of the slaves. Assuming the standard roles of the races, Delano ignores many troubling signs. The ship is actually filled with rebel slaves who killed off their slave owner, Alexandro Aranda, and are in control of the Spaniards and Captain Benito. Captain Benito is constantly served by Babo, the leader of the rebellion, and Delano does not suspect anything despite the fact that Benito was never left alone. Under Babo's control, Cereno claims he headed toward the Bolivian coast in order to acquire more hands on deck. Due to all of the aforementioned conditions, the ship has doubled its path several times. At this point, Don Benito stops and states, "I have to thank those Negroes you see, who, though to your inexperienced eyes appearing unruly, have, indeed, conducted themselves with less of restlessness than even their owner could have thought possible under such circumstances." When Delano asks about the slaves' master, Alexandro Aranda, Benito states that he took fever aboard the ship and died. Delano sends his men back to bring more food and water and stays aboard in the company of its Spanish captain, Don Benito Cereno, and his Senegalese servant, Babo, who is always by his side. Don Benito’s timidness and unwillingness to punish the wild behavior of the slaves confuses Delano, but he overlooks this strange behavior. Cereno is constantly attended to by his personal slave, Babo, whom he keeps in close company even when Delano suggests that Babo leave the two in private. Delano, however, does not bother Cereno to ask questions about the odd superficiality of their conversation. Delano doesn't see Babo's extreme care for his master as odd, but instead appreciates Babo’s faithful care of Cereno and offers to help out by sending three Americans to bring the ship to Concepción.
Delano is disturbed by the incidents he observes among the hatchet polishers and oakum pickers, such as when a black boy slashes the head of a white boy with a knife. Surprisingly, Cereno does not acknowledge or even seem to care about this behavior. This is also evident with Atufal, a slave who even in chains appears regal and rebellious. The whispered conversations between Cereno and Babo make Delano feel uncomfortable. Gradually, his suspicions increase as he notes Cereno's sudden waves of dizziness and anxiety, the crew's awkward movements and hushed talks, and the unusual interaction of the slaves and the crew. Yet Delano answers Cereno’s questions about the crew, cargo, and arms aboard the Bachelor’s Delight without reserve, reasoning that the innocent are protected by the truth. When The Rover arrives with supplies, Delano sends the dinghy back for more water while he continues to observe curious incidents.
Babo reminds Cereno that it’s time for his shave. "Most negroes are natural valets and hairdressers; taking to the comb and brush congenially as to the castinets, and flourishing them apparently with equal satisfaction," springing from "the docility arising from the unaspiring contentment of a limited mind." Babo suggests that Delano join them in the cuddy to continue his conversation with Cereno, and Delano witnesses the shaving with an appreciative eye for Babo’s graceful skill as a barber and a hairdresser. Their suspicious behavior continues when Babo first searches "for the sharpest" razor and Cereno "nervously shuddered" at the "sight of gleaming steel." Delano himself, for a brief moment, cannot resist "the vagary, that in the black he saw a headsman, and in the white, a man at the block." Cereno is nervously shaking, and just when Delano asks him how he spent over two months crossing a distance Delano himself would have sailed within a few days, "Just then the razor drew blood." Immediately, "the black barber drew back his steel." It is unclear whether the nick is caused by a sudden wave on the sea, or "a momentary unsteadiness of the servant’s hand." Delano precedes the two out of the cuddy and walks to the mainmast, where Babo joins him, complaining that Cereno cut his cheek in reproach for his carelessness even though Cereno’s own shaking caused the cut. Delano feels that slavery fosters ugly passions and invites Cereno for coffee aboard the Bachelor’s Delight. Cereno declines the offer, offending Delano, who is also increasingly irritated by the lack of opportunity to have a private conversation without Babo within hearing distance.
When the American steps into The Rover and takes off, "Don Benito sprang over the bulwarks, falling at the feet of Captain Delano." Three Spanish sailors dive after him along with Babo, who is holding a dagger and accompanied by a dark avalanche of slaves. Delano fears Babo wants to attack him, but he loses the dagger when he falls into the boat. With a second dagger, Babo continues his attack. His purpose is now revealed: "Not Captain Delano, but Don Benito, the black, leaping into the boat, had intended to stab." Delano’s men prevent him from achieving his purpose. Delano, "now with the scales dropped from his eyes," realizes that a slave revolt has been going on aboard the San Dominick. He sees the remaining sailors taking flight into the masts to escape the "flourishing hatchets and knives" of the blacks who are after them. The canvas falls off the ship's figurehead, revealing the strung-up skeleton of Alexandro Aranda. Delano secures Babo, and his men, under command of his chief mate, attack the Spanish ship to claim booty by defeating the revolting slaves.
Eventually, legal depositions taken at Lima explain the matter. Instead of storm and epidemics, a bloody slave revolt under Babo’s command causes mortalities among the crew, including Aranda. As Delano approaches, the revolting slaves set up the delusion that the surviving whites are still in charge. Delano asks the sad Benito: "’you are saved; what has cast such a shadow upon you?'" To which Cereno replies: "’The negro.’"
Some months after the trial, Babo is executed never having said a word to defend himself: his body is burned but his head is "fixed on a pole in the Plaza, [meeting], unabashed, the gaze of the whites." Babo's head looks in the direction of St. Bartholomew’s church, where "the recovered bones of Aranda" lay, and further across the bridge "towards the monastery on Mount Agonia without: where, three months after being dismissed by the court, Benito Cereno, borne on the bier, did, indeed, follow his leader."