The film opens with Chief Inspector Uhl (Paul Giamatti) narrating the tale of Eisenheim the Illusionist to Crown Prince Leopold (Rufus Sewell), after Uhl's dramatic visit to a theater where he attempts to arrest Eisenheim during what seems to be an illusion allegedly involving necromancy.
Eisenheim, born to a humble cabinetmaker in the region of Austria-Hungary, has his fateful encounter as a young man with a magician (David Forest) who teaches him the art of magic. This meeting ignites a deep fascination with the craft in Eisenheim, played in his younger days by Aaron Johnson. Simultaneously, he falls in love with Sophie, the Duchess von Teschen, portrayed by Jessica Biel when she is still a young lady, played by Eleanor Tomlinson. Their bond is forged in secret – even as he gifts her a unique marquetry puzzle locket that reveals a hidden picture of him. Despite their love, social boundaries keep them apart, and on the day they plan to escape to China to explore the depths of magic, they are thwarted when the authorities intervene, leading to a heart-wrenching separation.
Years later, Eisenheim returns, transformed into a master of illusions. During a performance, he unexpectedly reunites with Sophie, only to discover she is to be wed to the menacing Crown Prince Leopold, who has a dismal reputation for treating women cruelly. The two rekindle their romance in secrecy, discovering that Sophie still cherishes the locket from their youth. Their desire to be together escalates, yet they perceive the threat posed by Leonardo's ambitions to seize power and eliminate anyone in his way. This includes their desperate plans for escape, jeopardized by Sophie’s awareness of Leopold's nefarious intentions.
When Leopold learns of their meetings through Uhl’s surveillance, he confronts Sophie in a drunken rage, resulting in her apparent murder. This tragedy plunges Eisenheim into despair just as the public starts to suspect Leopold's involvement. Driven by grief, he crafts a new magic show that incites intrigue as he seems to summon the spirit of Sophie during a performance.
In a twist, Leopold attends this show incognito and panics when Sophie’s spirit accuses someone in the audience of her murder. As Uhl, entwined in the prince's web of deceit, presses for answers, Eisenheim cleverly uses his tricks to elude capture, disappearing before their eyes during a performance.
Uhl’s investigation leads him to the hidden truth about Sophie's locket and the deadly deception orchestrated by Leopold. In a tension-filled climax, Uhl reveals the connection between the prince and Sophie's demise, leading to a frantic culmination where Leopold, in desperation, takes his own life rather than face the consequences of his actions.
In a final twist of fate, Uhl receives a folio labeled "Orange Tree" from a young boy, brimming with mechanisms that hint at Eisenheim’s clever deception. This revelation leads Uhl to the realization of Eisenheim’s true escape plan and, with bemusement rather than anger at the unfolding events, he watches as Eisenheim, in disguise, approaches waiting Sophie, who has been hidden away. The two lovers, against the backdrop of intrigue and danger, look poised for their reunion, a testament to the enduring power of love and illusion.
