An Englishman sits in a stable preparing for a caravan trip though the Sahara desert. He studies alchemy and hopes to learn from an alchemist residing in the desert’s Al-Fayoum oasis. The legendary alchemist supposedly discovered the Philosopher’s Stone and the Elixir of Life.
Santiago also joins the group traveling with the desert caravan, and he tells the Englishman his story of working for the crystal merchant. The Englishman seems unfriendly at first, telling Santiago that Urim and Thummim are cheap rock crystals. Santiago explains that a king gave them to him, but that the Englishman wouldn’t understand. The Englishman says he does understand, because he read the story of Urim and Thummim in the Bible. He explains that he is seeking an alchemist, and Santiago replies that he is heading to Egypt to look for treasure. As the caravan sets off, the caravan leader orders everyone to swear to their God that they will follow his orders. On their trip, the Englishman reads constantly, so Santiago speaks to him very little during the journey. Instead, he daydreams, tries to read his book, and befriends a camel driver.
Santiago relates his adventures as a shepherd to the camel driver, and one day the camel driver tells Santiago his own story. He maintained a successful orchard, had travelled to Mecca, and felt he could die happily. However, one day an earthquake caused a flood that ruined his land, so he had to become a camel driver. These events taught him not to fear losing material possessions.
The caravan runs into groups of hooded Bedouins who warn of nearby thieves, barbarians, and tribal wars. The caravan travels quickly through the dangerous area, and no one speaks at night. The travelers do not light their fires either so as not to draw attention, and they must huddle around a circle of camels to stay warm. One night, the Englishman, unable to sleep, walks with Santiago around the encampment. Santiago goes into detail about the story of his life, and the Englishman compares Santiago’s success to the governing principle of alchemy, called the Soul of the World. The term refers to the positive force of the world that works for the betterment of all things, both living and inanimate.
Santiago decides to learn more about the Soul of the World by reading the Englishman’s alchemy books. He learns that the most important text in alchemy is inscribed on an emerald, called the Emerald Tablet, and runs only a few lines. He also reads about the Master Work, which entails purifying metals to the point that all that is left of them is the Soul of the World. The Master Work has two parts, a liquid part called the Elixir of Life that cures all ills, and a solid part called the Philosophers Stone that can transform any metal into gold. The Englishman talks to Santiago about alchemy but feels disappointed with his superficial understanding of the practice.
A war begins in the desert but the caravan reaches the oasis safely. Egypt remains a long distance away, but Santiago feels pleased not to travel in fear any longer.