In the beginning of the story, the setting is inside Kino and Juana's hut. After they have woken up, Coyotito is bitten by a scorpion and has fallen ill.
Kino and Juana know that Coyotito is not in good condition. The setting changes as they travel into the wealthy part of town to see if the doctor can help their baby.
After being turned down by the doctor, Kino and Juana go to their canoe, at the beach so that Kino can dive for pearls. Kino dives for pearls in hopes of finding one so magnificent that it will help cure Coyotito.
Once Kino and Juana have ventured out far enough, Kino dives for the pearls in the gulf. Upon coming out of the water, Kino finds the "Pearl of the World".
Kino, Juana, and Coyotito make the trek back to town with their great pearl. Kino is very proud of his find and he tells all who congratulate him, that he will sell it.
After word has gotten out about Kino's pearl, many people come to visit him including the doctor that had turned Coyotito down. After the doctor's visit, Juana and Kino sense something fishy is going on. Coyotito's health is declining and Kino and Juana go to bed.