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It is a dark time for England. Four generations after the Norman conquest of the island, the tensions between Saxons and Normans are at a peak; the two peoples even refuse to speak one another's languages. King Richard is in an Austrian prison after having been captured on his way home from the Crusades; his avaricious brother, Prince John, sits on the throne, and under his reign the Norman nobles have begun routinely abusing their power. Saxon lands are capriciously repossessed, and many Saxon landowners are made into serfs. These practices have enraged the Saxon nobility, particularly the fiery Cedric of Rotherwood. Cedric is so loyal to the Saxon cause that he has disinherited his son Ivanhoe for following King Richard to war. Additionally, Ivanhoe fell in love with Cedric's high-born ward Rowena, whom Cedric intends to marry to Athelstane, a descendent of a long-dead Saxon king. Cedric hopes that the union will reawaken the Saxon royal line.
Unbeknownst to his father, Ivanhoe has recently returned to England disguised as a religious pilgrim. Assuming a new disguise as the Disinherited Knight, he fights in the great tournament at Ashby-de-la-Zouche. Here, with the help of a mysterious Black Knight, he vanquishes his great enemy, the Templar Brian de Bois-Guilbert, and wins the tournament. He names Rowena the Queen of Love and Beauty, and reveals his identity to the crowd. But he is badly wounded and collapses on the field. In the meantime, the wicked Prince John has heard a rumor that Richard is free from his Austrian prison. He and his advisors, Waldemar Fitzurse, Maurice de Bracy, and Reginald Front-de-Boeuf, begin plotting how to stop Richard from returning to power in England.
John has a scheme to marry Rowena to de Bracy; unable to wait, de Bracy kidnaps Cedric's party on its way home from the tournament, imprisoning the Saxons in Front-de-Boeuf's castle of Torquilstone. With the party are Cedric, Rowena, and Athelstane, as well as Isaac and Rebecca, a Jewish father and daughter who have been tending to Ivanhoe after his injury, and Ivanhoe himself. De Bracy attempts to convince Rowena to marry him, while de Bois-Guilbert attempts to seduce Rebecca, who has fallen in love with Ivanhoe. Both men fail, and the castle is attacked by a force led by the Black Knight who helped Ivanhoe at the tournament. Fighting with the Black Knight are the legendary outlaws of the forest, Robin Hood and his merry men. The villains are defeated and the prisoners are freed, but de Bois-Guilbert succeeds in kidnapping Rebecca. As the battle winds down, Ulrica, a Saxon crone, lights the castle on fire, and it burns to the ground, engulfing both Ulrica and Front-de-Boeuf.
At Templestowe, the stronghold of the Knights-Templars, de Bois-Guilbert comes under fire from his commanders for bringing a Jew into their sacred fortress. It is speculated among the Templars that perhaps Rebecca is a sorceress who has enchanted de Bois-Guilbert against his will; the Grand Master of the Templars concurs and orders a trial for Rebecca. On the advice of de Bois-Guilbert, who has fallen in love with her, Rebecca demands a trial-by-combat, and can do nothing but await a hero to defend her. To his dismay, de Bois-Guilbert is appointed to fight for the Templars: if he wins, Rebecca will be killed, and if he loses, he himself will die. At the last moment, Ivanhoe appears to defend Rebecca, but he is so exhausted from the journey that de Bois-Guilbert unseats him in the first pass. But Ivanhoe wins a strange victory when de Bois-Guilbert falls dead from his horse, killed by his own conflicting passions.
In the meantime, the Black Knight has defeated an ambush carried out by Waldemar Fitzurse and announced himself as King Richard, returned to England at last. When Athelstane steps out of the way, Ivanhoe and Rowena are married; Rebecca visits Rowena one last time to thank her for Ivanhoe's role in saving her life. Rebecca and Isaac are sailing for their new home in Granada; Ivanhoe goes on to have a heroic career under King Richard, until the king's untimely death puts an end to all his worldly projects.
