A pearl-diving village in the Far East.
As the villagers prepare for their dive, they sing of the dangers of the the sea. Zurga calls on them to elect a new leader and the villagers unanimously choose him.
Zurga’s old friend Nadir returns to the village after spending a year away. Zurga welcomes him and together they recall that their friendship was almost destroyed when they both fell in love with a Hindu priestess. Nadir swears he has kept the vow they both made to protect their friendship by staying away from her.
A boat arrives carrying a veiled girl: the priestess chosen to sing and pray all night to bless the fishing season. She is accompanied by the Nourabad, the high priest. Although she is veiled, Nadir immediately realizes she is Leïla, the priestess he still loves. Zurga, who does not recognize her, imposes an oath of obedience upon her on pain of death – Leïla is to remain veiled and pure. Her reward for keeping the divers safe from harm will be their finest pearl.
Nadir, alone, confesses that he and Leïla have met illicitly and that he has followed her to the village. He listens as she begins her incantation and, unable to resist any longer, calls out to her. She breaks off, answering his love.
Nourabad tells Leïla that the divers have returned safely and she can now sleep until morning in the temple. He stresses the importance of her vow. She describes how as a little girl, she once protected a fugitive. The man she saved gave her a necklace, which she wears to this day.
In her sleep, Leïla dreams of Nadir, who is making his way to the temple. Nadir’s voice approaches and the lovers are reunited. As a storm breaks out, the couple are discovered by Nourabad, who blames them for the storm. Zurga protects his friend from the fury of the villagers, who demand his immediate death. Nourabad tears off Leïla’s veil. Zurga finally recognizes Leïla and realizes that Nadir has betrayed their oath. He angrily demands death for the guilty couple.
The storm has died away but the village has suffered terrible damage from flooding. Zurga’s anger has passed and he sadly reflects on Nadir’s fate.
Leïla begs Zurga to save Nadir’s life, but his jealousy rages when he realises how much Leïla loves his rival. He allows Nourabad to take her to be sacrificed together with Nadir. Before she leaves, she gives her special necklace to one of the young divers and asks him to give it to her mother. Zurga seizes the necklace with a cry.
The pearl fishers prepare for the ritual deaths of Leïla and Nadir at dawn. Zurga stops them with the news that the village is on fire, and the villagers flee to try and save their children. Zurga releases Nadir and Leïla and explains that he set the village alight in order to rescue them. He reveals that he was the fugitive Leïla saved many years ago. The lovers gratefully make their escape and Zurga is left to face the consequences of his actions.