As the last of her kind, a female unicorn embarks on a dangerous journey to find her lost relatives, guided by the wisdom of two experienced hunters and a delicate butterfly. She believes that a dark entity known as the Red Bull has systematically wiped out her kin, forcing them to the most remote corners of the earth.
Her adventure takes an unexpected twist when she becomes a captive at Mommy Fortuna's enchanting Midnight Carnival. Here, she is put on display alongside other creatures, whose forms have been altered through illusions to mimic mythical beings. The devious witch has cast a spell on the unicorn, shrouding her true identity from carnival-goers and outfitting her with a fake horn. Additionally, Fortuna keeps Celaeno, an immortal harpy, imprisoned for the prestige she bestows upon her captor.
Within the carnival, the unicorn befriends Schmendrick, a hapless magician who is Fortuna's assistant. Their bond forms a partnership that enables their escape, inadvertently freeing Celaeno as well. Following their dramatic exit, the trio encounters Molly Grue, a resilient beauty whose unrequited love for Captain Cully—the real-life counterpart to the legendary Robin Hood—has left her disillusioned and reflective.
As they journey towards the seaside fortress of King Haggard, guardian of the Red Bull, the unicorn faces the fiery beast itself. Just in the nick of time, Schmendrick's unpredictable magic transforms the unicorn into a mortal woman, drastically changing the dynamics of their quest. While the Red Bull loses focus on her, she grapples with the bewildering sensations of human life; Schmendrick vows to revert her to her true form once their mission concludes.
With the steadfast support of Molly Grue and Schmendrick, the transformed unicorn, now referred to as Lady Amalthea, enters the ominous castle of Haggard. The king is initially unsympathetic, yet Schmendrick's introduction of Amalthea and their request to join his court yields a reluctant welcome. They find themselves accommodated within the castle, with Molly relegated to menial duties in the kitchen and Schmendrick ascending to the role of Haggard's new wizard, taking the place of Mabruk.
However, Mabruk soon realizes the truth about Amalthea and exits the castle, ridiculing Haggard for inviting doom upon himself by permitting her entry. As Amalthea navigates the complexities of her new human feelings, she finds herself deeply enamored with Prince Lír, sowing seeds of doubt regarding her original quest. Her brush with mortality reignites a desire for a life free from immortal responsibilities, prompting her to reconsider her resolve to reunite with her kind. King Haggard hints at the whereabouts of the unicorns, yet his apprehension about her identity and its ramifications for his realm grows increasingly apparent.
Molly, Schmendrick, and Amalthea (in her human guise) soon infiltrate the lair of the Red Bull, only to fall into a devious trap orchestrated by Haggard. Their aspirations thwarted, they find themselves surrounded by the merciless hunter. In this critical moment, Schmendrick reveals Amalthea's true nature as a unicorn to Lír, who surprisingly professes his everlasting love for her. This declaration calls into question Amalthea's commitment to her quest, yet Schmendrick's encouraging words urge Lír to keep her focus on rescuing her kin.
As tense moments unfold, the Red Bull appears, no longer deceived by Amalthea's human facade. The creature launches into a frenzy, creating chaos among the group. In a desperate attempt to restore order, Schmendrick transforms Amalthea back into her glorious unicorn form. However, she defies the call to leave Lír, and the bull drives her towards the ocean, echoing the fate of other unicorns before her. In a valiant effort to protect his beloved, Lír confronts the Bull, but ultimately falls victim to its ferocious might.
Fueled by an overwhelming mix of anger and determination, the Unicorn retaliates against the Red Bull, forcing it into the depths of the sea. As the beast meets its watery end, a multitude of long-lost unicorns rise from the turbulent waves, brought forth by the tides. With their liberation, Haggard's castle collapses into the ocean, sealing the treacherous hunter's fate as he watches helplessly from the ramparts.
On the beach, the Unicorn uses her mystical abilities to revive Lír, before saying her goodbyes. Schmendrick offers words of consolation, suggesting that Lír gained immensely by loving a unicorn, even if it meant enduring solitude. The Unicorn, however, views their journey as pivotal in restoring her kin to the world, and as a means for her to grasp the importance of both regret and love. As she departs for her woodland sanctuary, Schmendrick and Molly stand by, aware that their actions significantly contributed to this new era of freedom for the unicorns.
