King Lear intends to divide his kingdom among his three daughters, so that he can enjoy old age without the burdens of power. He has planned a ceremony in which each daughter will state how much she loves him, before an audience of nobles including Lear's long-trusted advisor, Kent, the Earl of Gloucester, and two suitors for his youngest daughter's hand, Burgundy and France. During the ceremony, his elder daughters, Goneril and Regan each profess to love Lear more than anything in the world. However, his youngest daughter, Cordelia, refuses to play along; when her turn comes, she says that she loves Lear "no more, no less" than she should as a daughter. Enraged, Lear strips her of her dowry, and banishes Kent when the latter attempts to intercede on Cordelia's behalf. France says he will marry Cordelia even without a dowry. Lear then tells the gathered nobles that he will keep one hundred knights and alternate months living with Goneril and her husband, Albany, and Regan and her husband, Cornwall.
Back at Gloucester's palace, Edmund, Gloucester's illegitimate son, plans to displace his legitimate brother, Edgar, as Gloucester's heir by turning Gloucester against Edgar. Edmund tricks Gloucester into thinking that Edgar is conspiring to kill him. Meanwhile, Goneril, with whom Lear has gone to live first, becomes angry with her father and his knights for causing chaos in her household. She orders her steward Oswald to treat Lear coldly. Meanwhile, the banished Kent returns to Lear in disguise, offers his services, and is accepted as part of Lear's company. Goneril criticizes Lear for his knights' rowdiness and demands that he dismiss half of them. Deeply insulted and angered, Lear curses Goneril and prepares to leave to go and stay with Regan along with his Fool and his other followers.
Back at Gloucester's castle, Edmund's conspiracy moves along. After Edmund tricks Edgar into fleeing, Gloucester, convinced of Edgar's evil intentions, condemns him to death, declaring Edmund his legitimate heir. Cornwall and Regan arrive at Gloucester's castle and welcome Edmund into their service. Outside, Kent and Oswald arrive with letters for Regan from Lear and Goneril. Kent insults Oswald and challenges him to fight. Roused by the disturbance, Cornwall puts Kent into the stocks—even though such an action is disrespectful to Lear. Elsewhere in the countryside, Edgar disguises himself as a mad beggar "Poor Tom" in order to escape the death sentence declared by his father. Lear himself arrives at Gloucester's castle. Upset to find his man Kent (still in disguise) in the stocks, he grows increasingly angry when Cornwall and Regan refuse to see him. Shortly after Regan finally comes out, Goneril arrives. Lear quarrels bitterly with both, as Regan joins Goneril in claiming that Lear does not need to maintain any attendants of his own. When each says that he may stay with them only if he dismisses all of his knights, Lear rushes, mad with rage, into a brewing storm. Cornwall, Regan, and Goneril lock up Gloucester's castle to keep Lear out.
Searching for Lear, Kent, who has been released from the stocks, meets a Gentleman who tells him that Lear and the Fool are alone in the storm. Kent tells the Gentleman that French forces are on their way to England. He gives the Gentleman his purse along with an identifying ring to bring to Cordelia, and asks the Gentleman to tell her about the injustice that Lear has suffered. Meanwhile, Lear has gone mad and is raging against the storm, while the Fool begs him to seek shelter. When Kent finds them, he leads them toward a hovel. Back inside the castle, Gloucester confides in Edmund that he has decided to try to help Lear; he also reports that he has received a letter about the French invasion. After Gloucester leaves to find Lear, Edmund tells the audience that he will betray his father to Cornwall.
Out on the heath, having reached the hovel, Lear, Kent, and the Fool find Edgar, disguised as Poor Tom, inside. Gloucester finds them soon after, and leads them to the shelter of a house. Inside Gloucester's castle, Edmund tells Cornwall about Gloucester's decision to help Lear and hands over the incriminating letter from France. In return, Cornwall makes Edmund Earl of Gloucester. Back in the house, hiding from the storm, Lear hallucinates that Goneril and Regan are on trial before himself, Edgar, and the Fool. Gloucester returns, tells Kent that Goneril, Regan, and their husbands are plotting Lear's death, and asks Kent to rush Lear to Cordelia, who has landed with France at Dover. Back inside the palace, Cornwall sends men to capture Gloucester and sends Edmund and Goneril to tell Albany that the French have landed. When Cornwall's forces bring in the captured Gloucester, Cornwall and Regan pull out Gloucester's eyes as punishment for his treachery. However, Cornwall's Servant attempts to stop him; they end up dueling. Although Regan stabs the servant in the back, Cornwall receives a wound that will eventually kill him. Regan throws the now blinded Gloucester out of his own castle. Two servants take pity on Gloucester, and decide to try to help him find Poor Tom, who they know is Edgar in disguise.
Outside Gloucester's palace, Edgar, still disguised as Poor Tom, meets his blinded father. Deeply moved, he agrees to show him the way to Dover. Meanwhile, Goneril and Edmund have traveled back to her palace to fetch Albany. However, Oswald meets them and reports that Albany has changed. Goneril quickly sends Edmund away. When Albany emerges, he berates her for her brutality to her father. In response, she criticizes him for becoming cowardly. A messenger arrives, interrupting their argument with news of both the death of Cornwall from the wound his servant gave him as well as the blinding of Gloucester.
In the French camp, Kent and a Gentleman discuss Cordelia's love of Lear, which has brought her back to Britain at the head of an invading French army. Kent reports that Lear himself is in Dover and, although he has spells of sanity, he is too ashamed to see Cordelia. In the camp, Cordelia herself sends a search party after her father. Back at Gloucester's palace, Regan questions Oswald about Goneril and Edmund. She states her feeling that, now that she is a widow, she should marry Edmund and asks Oswald to convince Goneril of the logic of this. As Oswald hurries off with a letter for Edmund from Goneril, Regan adds that she will show favor to anyone who kills the blinded Gloucester. Meanwhile, hoping to cure Gloucester of his despair, Edgar pretends to lead him to the cliffs of Dover (they are actually on flat ground). When Gloucester jumps, to commit suicide (in fact just fainting and falling), Edgar then hurries over to him while pretending to be someone who saw Gloucester jump, and telling Gloucester that the fact that he survived is a miracle. Lear shows up, raving mad; he jabbers at Gloucester about lechery, the abuse of power, and other human faults. When some of Cordelia's search party turn up, Lear runs off. Just the, Oswald happens upon Edgar and Gloucester. He attempts to kill Gloucester but Edgar kills him. In Oswald's purse, Edgar finds letters from Goneril to Edmund plotting Albany's death so that they can marry. In the French camp, Lear is awakened by the doctor treating him and is reunited with Cordelia.
At her camp, at the start of the battle, Goneril argues with Albany; she tells herself that she would rather lose the war against the French than let Regan marry Edmund. Edgar, still disguised as a peasant, brings Goneril's letter to Edmund, describing her plot against Albany, to Albany then quickly leaves, with instructions that Albany must summon him with three blows of a trumpet after the battle with the French, if the British have won. While Edgar places Gloucester beneath a tree to rest, the battle takes place off stage. In the battle, Britain defeats France and Lear and Cordelia are captured by Edmund. Edmund sends them to jail, then sends a Captain after them with secret instructions to kill them both. Summoned by Albany's Herald, Edgar arrives in disguise and fights and wounds Edmund, who, dying, admits to all his treacheries. Edgar identifies himself and explains that, right before coming, he revealed himself to Gloucester; Gloucester died in that moment of a mix of grief and joy. Goneril has poisoned Regan beforehand, in the hopes of securing Edmund for herself; however, when he dies, she also stabs herself. Before he dies, Edmund admits that he sent his Captain to hang Cordelia and kill Lear. Albany sends soldiers running off to try to save them. However, it is too late: Lear emerges from the prison with Cordelia's body in his arms, mad with grief. He explains that he killed the Captain who hung her but was too late to save her life. Lear dies of his sorrow on the spot. Only Albany and Edgar remain to pick up the pieces, as Kent concludes that he soon must follow his master (i.e., kill himself, too).