Imogen, the daughter of the British king Cymbeline, goes against her father's wishes and marries a lowborn gentleman, Posthumus, instead of his oafish stepson, Cloten. Cloten is the son of Cymbeline's new Queen, a villainous woman who has made the king her puppet. Cymbeline sends Posthumus into exile in Italy, where he encounters a smooth-tongued Italian named Iachimo. Iachimo argues that all women are naturally unchaste, and he makes a wager with Posthumus that he will be able to seduce Imogen. He goes to the British court and, failing in his initial attempt to convince the princess to sleep with him, resorts to trickery: He hides in a large chest and has it sent to her room; that night he slips out, observes her sleeping, and steals a bracelet that Posthumus once gave to her.

Cloten, meanwhile, continues to pursue Imogen, but she rebuffs him harshly. He becomes furious and vows revenge, while she worries over the loss of her bracelet. In the meantime, Iachimo has returned to Italy, and, displaying the stolen bracelet and an intimate knowledge of the details of Imogen's bedchamber, convinces Posthumus that he won the bet. Posthumus, furious at being betrayed by his wife, sends a letter to Britain ordering his servant, Pisanio, to murder Imogen. But Pisanio believes in Imogen's innocence, and he convinces her to disguise herself as a boy and go search for her husband, while he reports to Posthumus that he has killed her.

Imogen, however, soon becomes lost in the wilds of Wales, and she comes upon a cave where Belarius, an unjustly banished nobleman, lives with his two sons, Guiderius and Arviragus. In fact, the two young men are not his sons but Cymbeline's; Belarius has kidnapped them to avenge his banishment, though they themselves are ignorant of their true parentage. They welcome Imogen, who is still dressed as a boy. Meanwhile, Cloten appears, having come in pursuit of Imogen; he fights a duel with Guiderius, who kills him. Imogen, feeling ill, drinks a potion the queen has given her. Although the queen told her it was medicinal, the queen herself believed it to be a poison. However, the draught merely induces a deep sleep that resembles death. Belarius and his adoptive sons come upon Imogen and, heart-broken, lay her body beside that of the slain Cloten. Awaking after they have left the scene, she mistakes the body of Cloten for that of Posthumus, and she sinks into despair. A Roman army has invaded Britain, seeking the restoration of a certain tribute Britain has ceased to pay. (A "tribute" here is a payment given to one nation by another in return for a promise of non-aggression.) The disguised Imogen hires herself out to them as a page.

Posthumus and Iachimo are traveling with the Roman army, but Posthumus switches to the garb of a British peasant and fights valiantly for Britain. Indeed, in his combat he actively seeks death: He believes his servant to have carried out his orders and killed Imogen, and he regrets his actions. The Romans are defeated, thanks to the intervention of Belarius, Guiderius, and Arviragus, and Posthumus, still trying to punish himself, switches back to Roman garb and allows himself to be taken prisoner. That night, the god Jupiter promises the spirits of Posthumus's dead ancestors that he will care for their descendant. The next day, Cymbeline calls the prisoners before him, and the confusion is sorted out. Posthumus and Imogen are reunited, and they forgive a contrite Iachimo, who confesses his deception. The identity of Guiderius and Arviragus is revealed, Belarius is forgiven, and the Queen dies, leaving the king free of her evil influence. As a final gesture, Cymbeline frees the Roman prisoners and even agrees to resume paying the tribute.