In Britain, King Lear, in old age, chooses to retire and divide up Britain between his three daughters. However, he declares that they must first be wed before being given the land. He asks his daughters the extent of their love for him. The two oldest, Goneril and Regan, both flatter him with praise and are rewarded generously with land and marriage to the Duke of Albany and the Duke of Cornwall, respectively. Lear's youngest and most beloved daughter, Cordelia, refuses to flatter her father, going only so far as to say that she loves him as much as a daughter should. Lear, unjustly enraged, gives her no land. The Earl of Kent tries to convince Lear to reconsider, but Lear refuses then banishes Kent for acting traitorously by supporting Cordelia. Gloucester then brings the King of France and the Duke of Burgundy in and Lear offers Cordelia to Burgundy, though without a dowry of land, contrary to a previous agreement. Burgundy declines, but the French King, impressed by Cordelia's steadfastness, takes her as Queen of France. Next, Lear passes all powers and governance of Britain down to Albany and Cornwall.
Edmund, bastard son of Gloucester, vows to himself to reclaim land his father has given to his "legitimate" son Edgar. Edmund does this by showing his father a letter he (Edmund) forged, which makes it seem that Edgar wants to take over his father's lands and revenues jointly with Edmund. Gloucester is enraged, but Edmund calms him. Later, Edmund warns Edward that he is in trouble with his father, pretending to help him.
Goneril instructs her steward, Oswald, to act coldly to King Lear and his knights, in efforts to chide him since he continues to grow more unruly. Kent arrives, disguised as a servant, and offers his services to Lear, who accepts. However, as a result of the servants' lack of respect for Lear, his own fool's derisions of him, and Goneril's ill respect toward him, Lear storms out of Goneril's home, never to look on her again. Lear goes next to Regan's house. While leaving, the fool again criticizes Lear for giving his lands to his daughters. Lear fears he (himself) is becoming insane.
At Gloucester's castle, Edmund convinces Edgar to flee, then wounds himself to make it look like Edgar attacked him. Gloucester, thankful for Edmund's support of him, vows to capture Edgar and reward Edmund. Regan and Cornwall arrive to discuss with Albany their ensuing war against Lear. Kent arrives at Gloucester's with a message from Lear and meets Oswald (whom Kent dislikes and mistrusts) with a message from Goneril. Kent attacks Oswald, but Cornwall and Regan break up the fight, afterwhich Kent is put in the stocks for 24 hours. Edgar, still running, tells himself he must disguise himself as a beggar. King Lear arrives, finding Kent in the stocks. At first, Regan and Cornwall refuse to see Lear, further enraging him, but then they allow him to enter. Oswald and Goneril arrive, and Lear becomes further enraged. After Regan and Goneril chide Lear to the brink, he leaves Gloucester's castle, entering a storm. The daughters and Cornwall are glad he leaves, though Gloucester is privately concerned for his health.
In the storm, Kent sends a man to Dover to get Cordelia and her French forces to rescue Lear and help him fight Albany and Cornwall. Lear stands in the storm swearing at it and his daughters, but Kent convinces him to hide in a cave. Gloucester tells Edmund of the French forces and departs for Lear, but Edmund plans to betray his father and inform Cornwall of the proceedings. Kent finds Lear, nearly delirious, in the storm, and tries to take him into the cave. Just then, Edgar emerges from the cave, pretending to be a madman. Lear likes him and refuses to go into the cave. Gloucester arrives (not recognizing Edgar), and convinces them all to go to a farmhouse of his. Edmund, as promised, informs Cornwall of Gloucester's dealings with the French army. Cornwall vows to arrest Gloucester and name Edmund the new Duke of Gloucester.
At the farmhouse, Lear, growing more insane, pretends his two eldest daughters are on trial for betraying him. Edgar laments that the King's predicament makes it difficult to keep up his (Edgar's) charade, out of sympathy for the King's madness. Gloucester returns and convinces Lear, Kent, and the fool to flee because Cornwall plans to kill him. Cornwall captures Gloucester and with Regan cheering him on, plucks out Gloucester's eyeballs with his bare fingers. During the torture, Gloucester's servant rescues his master from Cornwall and they flee to Dover to meet the French. On the way there, Gloucester and the servant meet Edgar (still a madman, named Poor Tom), who leads his father (Gloucester) the rest of the way.
At Albany's palace, Goneril promises her love to Edmund, since her husband (Albany) refuses to fight the French. Albany believes that the daughters mistreated their father (Lear). A messenger brings news that Cornwall is dead, from a fatal jab he received when a servant attacked him while he was plucking out Gloucester's eyeballs. Albany, feeling sorry for Gloucester and learning of Edmund's treachery with his wife, vows revenge.
At Dover, Cordelia sends a sentry out to find her estranged father. Regan instructs Oswald (Goneril's servant) to tell Edmund that she (Regan_ wants to marry him, since Cornwall is dead. Edgar pretends to let Gloucester jump off a cliff (Gloucester believes it truly happened), then Edgar pretends to be a different man and continues to help his father. Lear, fully mad now, approaches and speaks to them. Cordelia's men arrive and take Lear to her. Oswald comes across Edgar and Gloucester, threatening to kill them. Edgar, though, kills Oswald, and discovers by letter that Goneril plants to murder Albany and marry Edmund. At Cordelia's camp, King Lear awakes, more sane than before, and recognizes Cordelia.
At her camp, Goneril, while arguing with Albany, states to herself that she would rather lose the battle than let Regan marry Edmund. Edgar, disguised, brings warning of ill plots (by Goneril) to Albany. Lear and Cordelia are captured in battle by Edmund. Edmund sends them to jail and instructs a Captain to kill them. Edgar arrives and fights and wounds Edmund, who admits his treacheries to all. Goneril mortally poisons Regan, then stabs herself. Edmund reveals that he and Regan ordered the Captain to hang Cordelia and kill Lear. Lear then emerges with dead Cordelia, and tells all he killed the Captain that hung her. Edmund dies and King Lear, in grief over Cordelia, dies.