Antonio (the 'merchant of Venice') lends 3000 ducats to his friend Bassanio in order to assist him in his wooing of Portia, a wealthy and beautiful woman who lives at Belmont, an estate some distance from Venice.
However, Antonio's own money is tied up in business ventures that depend on the safe return of his ships from sea, so he borrows the money from Shylock, a Jewish moneylender who he has previously insulted for his high rates of interest. Shylock lends the money against a bond - failure to repay the loan on the agreed date will entitle Shylock to a pound of Antonio's flesh.
Portia's father has decreed that she will marry whichever suitor makes the correct choice when presented with three caskets, made of gold, silver and lead. Where wealthy suitors from Morocco and Aragon fail, Bassanio succeeds by choosing the lead casket. At the same time, Bassanio's friend Gratiano marries Nerissa, Portia's lady-in-waiting.
News arrives that Antonio's ships have been lost; he is unable to pay his debt. Shylock's claim to his pound of flesh is heard in the law court before the duke.
Stop reading now if you don't want to know how it ends...
Unknown to their husbands, the women disguise themselves and go to the court. Portia disguises herself as a young male lawyer acting on behalf of Antonio; Nerissa as a clerk.
Portia's ingenious defence is that Shylock is entitled to his pound of flesh but not to spill any of Antonio's blood; she argues that the Jew should forfeit his life for having conspired against the life of a Venetian.
The duke pardons Shylock on condition that he gives half his wealth to Antonio and half to the state. Antonio surrenders his claim on condition that Shylock converts to Christianity and leaves his property to his daughter Jessica, whom he has disinherited for running away with her Christian lover Lorenzo.
Portia and Nerissa then assert their power over Bassanio and Gratiano by means of a trick involving rings that the men have promised never to part with. Finally, there is good news about Antonio's ships.