An Andalusian shepherd boy named Santiago dreams of a treasure while in a ruined church. He consults a Gypsy fortune-teller about the meaning of the recurring dream. The woman interprets it as a prophecy, telling the boy that he will discover a treasure at the Egyptian pyramids.
After Santiago sets out, he meets an old king Melchizedek, or the king of Salem, who tells him to sell his sheep so as to travel to Egypt and accomplish his "Personal Legend". Early on his arrival in Africa, a man who claims to be able to take Santiago to the pyramids instead robs him of the money he had made from his flock. Santiago then has to work for a crystal merchant to earn enough to continue his journey.
Along the way, the boy meets an Englishman who has come in search of an alchemist and continues his travels with his new companion. When they reach an oasis, Santiago meets and falls in love with an Arabian girl named Fatima, to whom he proposes marriage. She promises to marry him only after he completes his journey. Frustrated at first, he later learns that true love will not stop nor must one sacrifice one's destiny to it, since to do so robs it of truth.
The Pyramids of GizaThe boy then encounters a wise alchemist, who teaches him to realize his true self. Together, they risk a journey through the territory of warring tribes, where Santiago is forced to demonstrate his oneness with the "Soul of the World" by turning himself into a dust storm before he is allowed to proceed.
When he reaches the pyramids and begins digging, he is robbed by thieves, who ask him what he is digging for; he replies that a dream has led him to buried treasure. The thieves scoff, and the leader remarks about a dream he once had about treasure under a tree at a ruined church. Santiago realizes the treasure he sought was where he had his original dream all along.
