Orsino, the Duke of Illyria, attempts to woo the Countess Olivia. She refuses because she is in mourning for her dead brother and will see no man. Meanwhile, off the coast, a storm has caused a terrible shipwreck. A young, shipwrecked, aristocratic-born woman named Viola, believing her twin brother drowned, disguises herself as a man, takes on the name Cesario, and enters the Duke’s service. The Duke asks Cesario to woo Olivia for him, but Olivia confesses her love for Cesario. In short order, the love triangle is complete: Viola loves Orsino, Orsino loves Olivia, and Olivia loves Cesario—and everyone is miserable.

     Maria, Olivia’s witty gentlewoman, along with many members in Olivia's household (including her rowdy drunken uncle, Sir Toby, his foolish friend, Sir Andrew, and Feste, the clever clown of the house), plays a trick on Malvolio, Olivia’s dour and prudish steward, by leaving him love letters purportedly written by Olivia. Malvolio makes a fool of himself as he is led to believe that Olivia loves him. Filled with dreams of marrying Olivia and becoming noble himself, he happily follows the letter's rediculous commands. He behaves so strangely that Olivia comes to think that he is mad.

     Sebastian, who is alive after all but believes his sister Viola to be dead, arrives in Illyria along with his friend and protector, Antonio. Antonio has cared for Sebastian since the shipwreck and is passionately attached to the young man—so much so that he follows him to Orsino’s domain, in spite of the fact that he and Orsino are old enemies.

     Sir Andrew, another of Olivia’s suitors, challenges Cesario to a fight but Cesario declines the invitation. Nevertheless, Sir Andrew and Sir Toby end up coming to blows with Sebastian, thinking that he is Cesario. Olivia enters amid the confusion. Encountering Sebastian and thinking that he is Cesario, she asks him to marry her. He is baffled, since he has never seen her before, but agrees to go along with her. Meanwhile, Antonio is arrested by Orsino’s officers and begs Cesario for help, mistaking him for Sebastian. Viola denies knowing Antonio, and Antonio is dragged off, crying out that Sebastian has betrayed him. 

     Malvolio’s supposed madness has allowed the gleeful Maria, Toby, and the rest to lock Malvolio into a small, dark room for his treatment, and they torment him at will. However, Sir Toby begins to think better of the joke, and they allow Malvolio to send a letter to Olivia, in which he asks to be released.

     Eventually, Viola (still disguised as Cesario), Orsino, Antonio, and Sebastian all make their way to Olivia’s house, where all is revealed. The siblings are joyfully reunited, and Orsino realizes that he loves Viola, now that he knows she is a woman, and asks her to marry him. We discover that Sir Toby and Maria have also been married privately. Finally, someone remembers Malvolio and lets him out of the dark room. The trick is revealed in full, and the embittered Malvolio storms off, leaving the happy couples to their celebration.