The Castle of Otranto tells the story of Prince Manfred and his family, which includes his wife (Hippolita) and his children (Conrad and Matilda). The story begins on the wedding day of Manfred’s son, Conrad, and the Princess Isabella. The wedding does not take place, however, for Conrad is crushed to death by a giant helmet moments before the event. Among the crowd is a handsome young peasant named Theodore, who muses that the helmet is like the one from the statue of Otranto’s founder, Alfonso. Though he has no reason to truly suspect Theodore of Conrad’s death, Manfred makes a big to-do about the peasant’s putative guilt, and imprisons him under the helmet.
The death of his son terrifies Manfred that a prophecy that the castle will pass on from their family is beginning to come true. Manfred plots to divorce his wife, Hippolita, on the grounds that she has failed to bear him a proper heir (he also claims they are related) and marry Isabella himself. Even though strange things begin to happen in the castle, Manfred is not deterred. When Manfred tells this to Isabella, she is horrified and flees into a passage beneath the castle. There she meets Theodore, newly escaped from the helmet; he aids her in escaping to a nearby convent.
The search for Isabella continues until Manfred confronts Theodore in the vault of the castle. Theodore says he has no knowledge of Isabella, but Manfred’s pride and rage persist. Matilda hears Theodore’s woeful singing and speaks to him briefly, admiring his piety and wondering if she can help him.
Father Jerome arrives from the convent and assures Manfred of Isabella’s safety, but he adds that Manfred’s plan to divorce his wife and marry the young girl offends Heaven. Manfred orders the execution of Theodore. As Theodore removes his shirt, Jerome recognizes the mark below his shoulder and identifies him as his own son, lost for years. Theodore, then, is the heir to Jerome, who was once the count of Falconara before his house was ruined and he turned to religion. Jerome begs for his son’s life, and Manfred offers to spare him in exchange for the release of Isabella.
They are interrupted as a herald enters, proclaiming that a great knight has arrived to rescue Isabella. The wily Manfred invites the mysterious knight, whose face is not seen, to palaver. The conversation ends and the search for Isabella recommences. In the meantime, Matilda frees Theodore from his imprisonment and helps him arm himself and flee the castle. Theodore finds Isabella in the woods and hides her in a cave, vowing to protect her. The great knight arrives and demands the girl, but Theodore, thinking he is an ally of Manfred’s, engages him in battle. Wounded seriously, the knight says he is Frederic, Isabella’s father who was presumed dead in the Holy Land. Isabella weeps over him, and Theodore helps her take him back to the castle.
Back in the castle, Frederic’s wounds are declared not too serious, and Manfred works on convincing him to wed Matilda if he will get to marry Isabella. His intention is to keep Otranto in his name, as he knows that Frederic’s line has also claimed lineage from Alfonso. Frederic is wary at first, but he is very attracted to Matilda and therefore agrees. Manfred tells Hippolita the truth about his plans, and, ever the dutiful wife, she seeks counsel from Jerome about a divorce. She also tells Matilda about her planned nuptials to Frederic, but by this time Matilda has realized she is in love with Theodore and is quite dismayed.
Manfred believes that Isabella will be meeting with Theodore for a tryst at the church, so he takes a knife with him. It is actually Matilda who is meeting Theodore, but Manfred does not know this and accidentally kills his own daughter.
Shock reverberates through the family and everyone else. Theodore is eventually revealed to be the true prince of Otranto with Matilda dead, and the grieving Manfred is left to repent. He abdicates the principality and retires to religion along with Hippolita. Theodore becomes prince and is married to Isabella, for she is the only one who can truly understand his sorrow.
