In late 12th century England, a deep-rooted animosity exists between the Saxons and Normans. The unpopular Norman Prince John now rules over England, following the departure of his brother, King Richard, to undertake the Third Crusade. Many believe that Richard has perished during his quest. However, Ivanhoe, a Saxon knight, embarks on a challenging journey back to England where he ultimately finds Richard imprisoned in Austria, suffering because John refuses to pay his ransom.
Upon his return to England, Ivanhoe disguises himself as a minstrel and heads to the castle of his estranged father, Cedric. Inside Cedric's banquet hall, the welcoming atmosphere is marred by the presence of Norman and Saxon guests, where Ivanhoe goes unrecognized except by his loyal servant, Wamba. Wamba leads him to see Rowena, Cedric's ward and Ivanhoe's long-time love. Just as they reconnect, Isaac, a Jewish traveler seeking refuge, arrives at the banquet; this is met with disdain from the Normans, especially from De Bois-Guilbert and Sir Hugh De Bracy. Nonetheless, Cedric insists on offering hospitality to Isaac.
As the festivities continue, the conversation drifts towards an upcoming tournament in Ashby. The Normans recall the legendary masked Saxon knight known as Sir Wilfred of Ivanhoe, who once triumphed over them in a previous tournament. Cedric, bitter about Ivanhoe's absence, casts him out from his life. When Ivanhoe later reveals himself to Cedric and seeks financial help for Richard’s ransom, Cedric dismisses him, believing the king has died. Ivanhoe assures Rowena that he will see her again after the tournament and departs with Wamba.
That night, an attack on Isaac is thwarted by Ivanhoe and Wamba, leading to a grateful Isaac inviting them to his home in Sheffield. There, Ivanhoe seeks Isaac's assistance in raising money for Richard's ransom. Despite harboring doubts about Richard's feelings towards Jews, Isaac agrees to aid Ivanhoe.
On the day of the tournament, Prince John presides over a competition where the well-equipped Normans easily dominate the less-prepared Saxon challengers. Suddenly, Ivanhoe enters the arena donning black armor, claiming only his Saxon heritage. The Saxons cheer him on as he skillfully defeats five Norman knights in succession. Even after sustaining an injury, Ivanhoe wins the tournament and chooses Rowena as the Queen of Love and Beauty, only to face Guilbert. A fierce clash ensues, resulting in Ivanhoe being unseated and taken off the field. Rebecca, a captivating woman who has absorbed medical knowledge, nurses Ivanhoe back to health while Rowena, sensing her feelings for Ivanhoe, decides to allow the care.
Meanwhile, Guilbert informs Prince John of Ivanhoe's quest for ransom funds, emphasizing Isaac’s wealth. In Sheffield, Rebecca privately confesses her love to the still-unconscious Ivanhoe, but her father's warning about the impossibility of their romance lingers. When Ivanhoe wakes, Isaac informs him that funds are being raised for the king's ransom, just as Wamba and Locksley, a nobleman, arrive with news of incoming danger from Prince John's men. At Ivanhoe’s request, Wamba takes Rebecca to Cedric while Ivanhoe hides in the forest.
As the Norman forces capture Cedric, Rowena, and Wamba, Ivanhoe is forced to negotiate with Guilbert, attempting to exchange himself for their safe release. However, Guilbert betrays him, chaining both him and Cedric instead. Meanwhile, De Bracy proposes to Rowena, meeting her resistance. Guilbert, obsessed with Rebecca, threatens her when she refuses his advances, leading her to a precarious situation on a balcony—only to relent under the condition that he frees Ivanhoe.
As Locksley and his archers incapacitate the guards surrounding the castle, a fierce battle ensues. Ivanhoe manages to rescue Rowena from De Bracy, but Guilbert holds Rebecca hostage, making his escape possible by using her as a shield. Subsequently, at Prince John's court, it becomes apparent that Rebecca is to be tried as a witch. With coerced testimonies stacked against her, only Guilbert speaks in her favor, pleading with her to renounce her faith to save her life.
During Rebecca's trial, Ivanhoe, unable to remain silent, tosses his glove down, challenging the court to a trial by combat against Guilbert, who is chosen as the champion by John. Just before the duel, Guilbert offers to let Ivanhoe win if Rebecca agrees to love him, but she chooses to trust in a higher power. The two engage in a brutal contest with a ball and chain as Richard's forces arrive, leading John to submission. Ultimately, Ivanhoe triumphs and Guilbert, dying, declares his love for Rebecca, lamenting that fate favored Ivanhoe's affection instead. After Guilbert's demise, Rowena confronts Rebecca about Ivanhoe, to which Rebecca insists that Ivanhoe's heart belongs to Rowena.
