To celebrate the Prince's birthday the townsfolk and children of the village arrive at the castle with garlands of flowers. Acrobats and jugglers prepare to entertain the guests. The tutor announces Prince Siegfried's arrival and the ladies and gentlemen of the court dance for the Prince.
When the Queen departs the celebrations continue. The tutor decides to entertain the Prince and he dances with a young peasant girl.
The celebrations come to an end and Prince Siegfried is left alone with his thoughts. He sees a flock of swans flying overhead and armed with his new crossbow he sets out to hunt in the forest.
Rothbart, the evil magician, half man, half bird, appears from beneath the Lake. The Prince arrives and sees a flock of beautiful swans - they are girls that have been transformed into swans by the wicked magician. Odette, Queen of the Swans appears. Siegfried is captivated by her beauty and Odette begins to trust the Prince.
Rothbart reappears and the Swans are scattered. Odette flees and Siegfried chases her into the night.
A formal celebration is taking place in honour of Prince Siegfried's birthday. Dancers arrive from many countries to join the festivities.
The Queen commands her son to select a bride from the princesses who are presented to him. He remains preoccupied and aloof because he intends to marry Odette, although at his mother's request he dances with the princesses.
With a flourish of trumpets Rothbart arrives with his daughter, Odile. Rothbart has cast a spell to make Odile appear like Odette.
After a display of national dances - Spanish, Czardas, Neopolitan and a Mazurka, Odile and Siegfried dance together. Convinced that Odile is his bride to be, he fails to see Odette pleading with him to remain faithful to her. Rothbart is jubilant and he insists that Siegfred swears to be faithful to Odile. Siegfried declares his love to Odile and tells the court he intends to marry her.
Rothbart summons Odette to show Siegfried that he has betrayed her for Odile. Triumphant in their victory Odile and Rothbart leave. In desperation, Siegfried returns to the lake to beg for Odette's forgiveness, leaving the Queen and the court in chaos and despair.
Knowing that she has been betrayed, Odette returns to her companions gathered at the lake's shore. Siegfried arrives at the lakeside to beg for Odette's forgiveness, which she grants.
Rothbart arrives and reminds Siegfried of his earlier promise. A fight ensues. Rothbart's evil spell is broken by the power of Siegfried and Odette's love for each other. Rothbart is destroyed by the Swans who are released from their enslavement. As the dawn of a new day rises, Siegfried and Odette are united in eternal love.