A young Venetian, Bassanio, needs a loan of three thousand ducats so that he can woo Portia, a wealthy Venetian heiress. He approaches his friend Antonio, a merchant. Antonio is short of money because all his wealth is invested in his fleet, which is currently at sea. He goes to a Jewish money lender, Shylock, who hates Antonio because of Antonio’s anti-semitic behaviour towards him.
Shylock nevertheless agrees to make the short-term loan, but, in a moment of dark humour, he makes a condition – the loan must be repaid in three months or Shylock will exact a pound of flesh from Antonio. Antonio agrees, confident that his ships will return in time.
Because of the terms of Portia’s father’s will, all suitors must choose from among three caskets, one of which contains a portrait of her. If he chooses that he may marry Portia, but if doesn’t he must vow never to marry or court another woman. The Princes of Morocco and Arragon fail the test and are rejected. As Bassanio prepares to travel to Belmont for the test, his friend Lorenzo elopes with Shylock’s daughter, Jessica. Bassanio chooses the lead casket, which contains her picture, and Portia happily agrees to marry him immediately.
Meanwhile, two of Antonio’s ships have been wrecked and Antonio’s creditors are pressurising him for repayment. Word comes to Bassanio about Antonio’s predicament, and he hurries back to Venice, leaving Portia behind. Portia follows him, accompanied by her maid, Nerissa. They are disguised as a male lawyer and his clerk. When Bassanio arrives the date for the repayment to Shylock has passed and Shylock is demanding his pound of flesh. Even when Bassanio offers much more than the amount in repayment, Shylock, now infuriated by the loss of his daughter, is intent on seeking revenge on the Christians. The Duke refuses to intervene.
Portia arrives in her disguise to defend Antonio. Given the authority of judgment by the Duke, Portia decides that Shylock can have the pound of flesh as long as he doesn’t draw blood, as it is against the law to shed a Christian’s blood. Since it is obvious that to draw a pound of flesh would kill Antonio, Shylock is denied his suit. Moreover, for conspiring to murder a Venetian citizen, Portia orders that he should forfeit all his wealth. Half is to go to Venice, and half to Antonio.
Antonio gives his half back to Shylock on the condition that Shylock bequeath it to his disinherited daughter, Jessica. Shylock must also convert to Christianity. A broken Shylock accepts. News arrives that Antonio’s remaining ships have returned safely. With the exception of Shylock, all celebrate a happy ending to the affair.