In a remote village in 1184 France, Balian (Orlando Bloom), a blacksmith, is haunted by his wife's recent suicide. A group of Crusaders arrive; one of them introduces himself as Balian's father, Baron Godfrey of Ibelin (Liam Neeson). Godfrey asks Balian to return with him to Jerusalem. Balian refuses and the Crusaders leave. The town priest, Balian's half-brother (Michael Sheen), reveals that he ordered Balian's wife beheaded before burial, a customary practice for people who commit suicide. Balian notices his brother wearing the cross that his wife wore before she was to be buried.In a fit of rage, Balian kills his brother, retrieves the crucifix and flees the village. Balian pursues his father in the hope of gaining forgiveness and redemption for him and his wife in Jerusalem. After he reaches Godfrey, soldiers led by Godfrey's nephew arrive, ostensibly to arrest Balian. In reality, the nephew intends to assassinate Balian and Godfrey so that his father, and eventually he, may inherit Godfrey's barony. Godfrey refuses to surrender Balian. The nephew launches a sneak attack against Godfrey. The attack fails and Godfrey kills his nephew but is struck by an arrow that breaks off in his body.In Messina, Godfrey knights Balian and orders him to serve the King of Jerusalem and protect the helpless, before succumbing to his injuries. Godfrey asks Balian to help the king maintain peace between Christians and Muslims. During Balian's journey to Jerusalem his ship runs aground in a storm, leaving Balian and a horse as the only survivors. When Balian releases the horse from the wreckage it flees in panic. Following the horse, Balian is confronted by a Muslim cavalier and his servant. A fight over the horse follows and Balian reluctantly slays the cavalier when attacked, but spares the servant, asking him to guide him to Jerusalem.Upon arriving, Balian gives the horse to the servant and releases him. The man tells him his slain master was an important knight among the Saracens (the Muslim warriors laying claim to Jerusalem); his deed will gain him fame and respect from them. Balian becomes acquainted with Jerusalem's political arena: the leper King Baldwin IV (Edward Norton), Tiberias (Jeremy Irons) the Marshal of Jerusalem, the King's sister, Princess Sibylla (Eva Green), and her husband Guy De Lusignan (Marton Csokas), who supports the anti-Muslim activities of brutal factions like the Knights Templar. Guy intends to rule after Baldwin's death and seeks to provoke a war that will allow him to dispose of the Muslims and claim the Kingdom for the Christians. Tiberias helps the King to thwart Guy and his ambitions of war between Christians and Muslims.Sibylla takes a liking to Balian & visits him in his Barony at Ibelin & has sex with him there. Balian immerses himself in the betterment of his barony by digging wells for water & uses that for irrigation. Guy and his co-conspirator, Raynald of Chatillon (Brendan Gleeson), massacre a Muslim trade caravan with the aid of the Templars. Saladin (Ghassan Massoud), leader of the Muslim forces, advances on Kerak, Raynald's castle, to punish him for his crime. Balian protects the villagers entering the castle from Saladin's cavalry, despite a request from Raynald to withdraw. Though outnumbered, Balian and his knights charge Saladin's cavalry, allowing the villagers time to flee.A fierce, but one-sided battle ensues in which Balian's knights are captured. In the enemy camp, Balian encounters the servant he freed, Imad ad-Din (Alexander Siddig), learning he is actually Saladin's Chancellor, who releases Balian to enter Kerak. Saladin arrives with his army to besiege Kerak and King Baldwin IV approaches with his. They negotiate a Muslim retreat and Baldwin swears to punish Raynald. Baldwin confronts Raynald, forcing him onto his knees. As Raynald grovels for mercy, Baldwin slaps him a few times and forces Raynald to kiss his diseased hand.The exertion of these events causes Baldwin to collapse, weakened beyond recovery. Saladin assures his generals that he will reclaim Jerusalem, but only when he is confident of victory. Baldwin asks Balian to marry Sibylla, knowing they have affection for each other, but Balian refuses because in order for the marriage to occur Guy would have to be killed. Balian refuses as this is against his religion and faith. After Baldwin dies, Sibylla succeeds her brother and names her son King.But soon the son is diagnosed with Leprosy & Sibylla cannot endure the horror of her son going thru what her brother went thru as a leper. Sibylla kills her own son & Guy ends up being King. Guy releases Raynald, asking him to give him a war, which Raynald does by murdering Saladin's sister. When Saladin's emissary relays demand for the return of his sister's body, the heads of those responsible and the surrender of Jerusalem, Guy decapitates the emissary and sends his head back to Damascus. Guy sends three Templars to assassinate Balian, since he is the most strident voice against a war, though Balian survives the assassination attempt.In council, war is agreed upon "because God wills it" and against sound advice they march into the desert to fight Saladin, leaving Jerusalem unguarded except for Balian, Tiberias, their knights, a few remaining Crusader soldiers and the townspeople. Saladin's army attacks the Crusaders and in the ensuing battle the Crusaders are annihilated. Guy and Raynald are captured; Saladin executes Raynald and then marches on Jerusalem, sparing Guy as king only out of tradition.Tiberias and his men leave for Cyprus, believing Jerusalem is lost, but Balian and his knights remain to protect the villagers. Knowing they cannot defeat the Saracens; they hope to hold their enemies off long enough for the Saracens to offer terms. After a battle that lasts three days, Saladin offers terms: Balian surrenders Jerusalem when Saladin offers the inhabitants safe passage to Christian lands.In the marching column of citizens, he finds Sibylla who has renounced her claim as Queen of Jerusalem and other cities. After Balian returns to his village in France, English knights ride through looking for Balian, defender of Jerusalem. Balian replies that he is the blacksmith, and the man leading the knights identifies himself as King Richard I of England (Iain Glen), and they commence a new Crusade to retake Jerusalem. Balian responds that he is merely a blacksmith, and Richard rides off. Balian is joined by Sibylla, and passing by the grave of Balian's wife, they ride toward a new life together.