In the dusky light of dawn, a mysterious gypsy prepares her cards to foretell the Fate of all those who cross her path.
Don Jose, a young lieutenant from the outpost in Seville, does his chores. He joined the army after being forced to leave his village, having mortally wounded an opponent in a fight. When he meets the gypsy Carmen, she casts her spell on him.
Micaela, a young girl from Don José’s village, delivers a letter from Don José’s mother trying to convince him to return home.
Carmen’s seductive advances towards Don José provoke Micaela. The two women fight and Carmen slashes Micaela’s face. Zuniga, Don José’s superior in the army, stops the fight and orders Don José to take Carmen to prison.
Carmen bribes Don José with a promise to meet him later at Lillas Pastia’s tavern and persuades him to let her escape. For this, Don José is sentenced to prison himself. When he is later released by Zuniga, he is demoted in rank.
At Lillas Pastia’s tavern Carmen entertains Zuniga. When Don José arrives, Lillas Pastia lures Zuniga into another room. Alone with Don José Carmen begins to dance for him, but they are interrupted by the sound of a bugle. Don José must return to the barracks. Carmen, angered because he chooses duty over her, mocks him and tells him to go. Zuniga returns and continues his pursuit of Carmen. Jealous and enraged Don José attacks and kills him.
Escamillo, a famous toreador, arrives and is immediately drawn to Carmen. Don José challenges him and, as he is about to kill Escamillo, Carmen stops him. Before Escamillo leaves, he invites all to come to the bullfight. Alone, Don José declares his love for Carmen. She succumbs, moved by his passion for her.
At the smuggler’s camp, Carmen and Done Jose celebrate their union. Carmen’s husband, García, comes upon the scene and demands that Don José leave. Don José refuses and the men go off to settle the matter. As they fight Carmen deals her cards, which spell her own imminent death. García staggers in and falls dead at Carmen’s feet. Micaela returns, hoping to save Don José from Carmen, but realizes it is too late. After killing Garcia, Don José sees that he has lost Carmen and leaves.
Carmen is now with Escamillo who is preparing for his bullfight. After he leaves, Don José confronts Carmen and pleads with her to come back to him and start a new life. Carmen says that she doesn’t love him anymore and that it is over. As they argue, Escamillo’s dead body is carried out of the ring. Carmen refuses Don Jose’s desperate urging, but she goes with him as far as the place where the cards have foretold that she will die.