Antonio, a wealthy merchant by trade having financial interests in overseas shipments, meets up with his good friend Bassanio. Bassanio then proceeds to tell Antonio of his depleted financial state, but cheers at the thought of solving his financial problems by marrying Portia, a woman who has come into a sizeable inheritance from her father. Bassanio then asks Antonio to lend him some money so that he could marry the woman of his choice.
The duo then proceeds towards the shop of Shylock, a Jewish money lender, who has a personal grudge with Antonio. Antonio asks Shylock to lend 3000 ducats to Bassanio, saying that he would pay the interest after his trade ships returned from sea, and if he did not pay Shylock, Shylock would have the right to cut of a pound of Antonio's flesh.
Bassanio and his friend Gratiano travel to Portia's house so that Bassanio can marry her. But Bassanio is given a riddle which he has to solve in order to win over Portia and marry her. He has to choose between 3 boxes, and the person who chooses the box which has Portia's photo in it, wins her. Bassanio chooses the correct box and is engaged to Portia. Meanwhile Gratiano and Portia's friend, Nerissa, also decide to marry each other.
But the festivities are cut short as Bassanio receives a letter from Antonio saying that none of Antonio's ships have returned to port. Now, as Antonio does not have any money, he cannot pay back Shylock. But Antonio readily agrees to have a pound of his flesh cut off by Shylock as per the agreement made by them. Antonio only wishes that Bassanio come and attend his death so that he can see his friend for one last time. Bassanio and Gratiano rush off from Portia's house with 3 times the amount needed to be paid to Shylock.
The trial starts and Bassanio and Gratiano try to bribe Shylock with 3 times the amount to be payed, but he does not agree. Shylock is determined to punish Antonio by cutting of a pound of flesh, but Portia and Nerissa make sure that it is otherwise. They disguise themselves as lawyers and come to the trial. Portia starts by trying to convince Shylock to spare Antonio, but Shylock is undeterred. But Portia finds a loophole in the deal. As Shylock had only asked for a pound of Antonio's flesh, then he must remove the flesh without taking blood.
Since Shylock cannot find a way to deliver the punishment without blood being spilled, he loses the bond, and since he is a foreigner and attempted to harm the life of a Venetian, he himself is subjected to punishment. He leaves the trial with his fortune of money considerably lessened. Antonio later finds out that all of his ships reached the port unscathed, and everybody rejoice. Bassanio marries Portia, Gratiano marries Nerissa, and everyone lives a happy life.