Alonso Quixano, a less-than-affluent man of fifty, "lean bodied" and "thin faced, lives modestly in the Spanish country village of La Mancha with his niece, Antonia, and a cranky housemaid. Practical in most things, compassionate to his social peers, the local clergy, and the servant classes, Quixano is respectful toward the ruling classes, whom he unquestioningly accepts as his superiors. He is driven neither by ambition for wealth and position nor bitterness at his genteel poverty.
Well read and thoughtful, Quixano's most prized possessions are his books. From his readings and studies, he becomes by degrees interested, then obsessed, with the codes, deeds, and tales of chivalry — of knights errant on some courtly and idealized mission. As his appetite for the lore of chivalry increases, Quixano begins selling off acres of his farmlands, using the funds to buy more books, and increasingly throwing himself into his studies. "From little sleep and too much reading his brain dried up and he lost his wits. He had a fancy . . . to turn his passion knight errant and travel through the world with horse and armor in search of adventures" with the purpose of "redressing all manner of wrongs."
At length, he is galvanized into action by his passion for the chivalric code. Outfitting himself with some old rusty armor, Quixano enlists his spavined hack horse to go forth in search of knightly adventures. Hopeful of finding a proper noble to dub him, Quixano finally is licensed in his venture by an innkeeper who believes him to be a lord of a manor. Now Quixano is "Don Quixote de La Mancha"; the tired hack and dray horse becomes elevated to "Rosinante."
All the new knight needs now in order to venture forth is a lady to whose service he is sworn and a servant or page. For the former, he chooses Dulcinea del Tobosa, named after Aldonza Lorenzo, a farm girl whom he had been taken with at one time.
After three days on the road, Quixote encounters a group of traveling salesmen whom he attacks after they refuse to acknowledge Dulcinea's great beauty. He is badly beaten by the servant of the salesman and forced to accept the help of a neighbor, who brings him home on the back of a donkey.
While he is recovering, Quixote is forced to watch as his housekeeper, a barber, and a priest burn all his books on chivalry in an attempt to persuade him to give up his improbable quest. But this only fuels Quixote's determination. He persuades Sancho Panza, a plump, simple-minded-but-opportunistic laborer, to serve as his page, by playing on his ambitions. Don Quixote promises Sancho his own island to govern, for surely such a splendid knight as he is sure to become will soon take many spoils.
And so this pair set forth, Quixote on his spavined old horse, Panza mounted on Dapple, his mule. Their second adventure lasts for three weeks and is comprised of a series of events that comprise the balance of Book One. Among other things, Quixote battles windmills, thinking them to be giants. At an inn, which he mistakes for a castle, Quixote is visited in bed by a maid, who causes a great uproar when she discovers she has come to the wrong room. Refusing to pay the bill and accusing the innkeeper of being inhospitable, Quixote is rousted, only to fall promptly into another misadventure with a religious procession, and yet other ironic and error-prone encounters with locals.
Interspersed among these adventures are a series of stories and moral tales, illustrating the pastoral storytelling tradition in Spain. As well, there are two long, learned disquisitions, delivered by Quixote. The first is a description of the Golden Age of mythology, told during a supper shared with some unlettered goatherds who don't understand a word he says. Later on, Quixote addresses a company during dinner at an inn in a debate about whether the career of arms is superior to that of letters, or vice versa.
Throughout the adventures it becomes clear that Quixote, for all his seeming madness, is a mild-mannered, empathetic man, genuine in his concern for chivalric ideals. Although he has agendas of his own, Sancho Panza has come to believe in and show loyalty to his new master. But in spite of all his good intentions, Quixote's quest leads him to be returned home, imprisoned in a cage on an ox-cart by his village priest and barber for Don Quixote's own good.
Published in a separate volume, Book Two of Don Quixote's adventures contains a unique feature. Shortly after Book One was published and Cervantes was at work on Book Two, he got word of the appearance of a pirated Book Two in which the author, a writer named Avellaneda, presumed to write further adventures of the knight, going so far as to renounce his service to Dulcinea. Cervantes was at Chapter 59 in Book Two, having Quixote and Panza headed to a jousting tournament in Saragossa. Now, angered by the pirated version, Cervantes sets forth in revenge by having Quixote and Panza eating dinner at an inn and "overhearing" talk of the Avellaneda version. The knight and squire promptly set forth to Barcelona, home of Don Alvaro Tarfe, a character from the Avellaneda book. When they arrive in Barcelona, they kidnap the Avellaneda character.
Book Two also introduces the character of Samson Carrasco, a young man from Don Quixote's village. A recent graduate of Salamanca University, Carrasco takes on the earlier roles of the priest and the barber in attempting to rescue and keep Don Quixote away from danger, but Don Quixote is not interested in being "rescued." He is determined to go to Tobosa to pay his respects to Dulcinea. They encounter three peasant girls and by some deception, Sancho hopes that his master will accept one of these as being Dulcinea. When events or appearances run counter to his expectations, Don Quixote tends to believe that enchanters have worked their mischief. In this instance, he believes enchanters have made Dulcinea look like an ugly peasant girl.
Don Quixote unexpectedly wins a battle with a knight (The Knight of the Mirrors), who turns out to be none other than Samson Carrasco in disguise. Samson had hoped to get the Don back home to safety by disguising himself as a rival knight. The plan backfires. Shortly afterwards, Don Quixote and Sancho Panza meet the "Knight in the Green Topcoat," which includes the episode of the lion with whom the Don wants to do battle.
The major portion of this section is devoted to an unnamed duke and duchess who, with their retainers, play a series of pranks — in the form of burlesque pageants — on Quixote. They also cause injury to both the knight and his squire. Another vital element is the appointment of Sancho Panza as governor of an island — another elaborate prank that ends with Panza renouncing the life of a feudal governor and showing a deep layer of loyalty to Quixote.
Once again Samson Carranzo appears, this time at the beach in Barcelona where, in the guise of The Knight of the White Moon, he challenges Don Quixote to battle. Of course, Quixote accepts the challenge and, in the presence of the viceroy and a distinguished company, is roundly defeated. A condition of Quixote's defeat is that he abandon knight errantry for the rest of his life.
In the remaining chapters, Don Quixote and Sancho Panza return to La Mancha, but not before they experience an additional stay with the Duke and Duchess and sundry other humiliating experiences suffered by the ex-knight.
When they arrive home, Don Quixote, apparently broken in spirit, is put to bed. After a long sleep, he declares his name to be Alonso Quixano once more and appears to have regained his reason. Shortly after he denounces chivalry and knighthood, he dies among the lamentation of friends.