Scene 1
Antechamber of the sepulchre of the Spanish kings in the palace of El Escorial. Don Carlo has secluded himself here, desolated by his cruel fate. The French princess Elisabeth of Valois, despite of his love for Carlo, in the name of peace between France and Spain, has given her consent to become the wife of Filippo and Queen of Spain. The memory of his first meeting with Elisabeth makes him suffer even deeper. There comes Marquis of Posa, his best friend. Rodrigo, Marquis of Posa, sympathizes with Don Carlo. His counsel is that the best thing to do would be if Carlo immediately left Spain; far from Elisabeth he would easier forget everything. The best to do would be for the infante to leave for Flanders and start a fight for the liberation of the people; that way he would do his duty. Don Carlo willingly agrees and both of them swear to dedicate their lives to fight for liberation.
Scene 2
A picturesque corner in the palace. While waiting the king and the queen, princess Eboli, the ladies-in-waiting and the pages have started singing a song. Queen Elisabeth comes and everybody is greeting her with respect. The lady-in-waiting Eboli sees that Elisabeth is full of suffering and tries to understand the reason. Rodrigo, Marquis of Posa, requests an audience by the queen. He gives her a letter and asks her to receive Don Carlo before his departure for Flanders. Full of suspects, princess Eboli is trying to hear their conversation. Elisabeth agrees to receive the infante and gives an order for everybody to leave. With Don Carlo's entrance, the feelings of both of them burst away with new intensity. Ardently and passionately sound their declarations of love. Elisabeth, however, gets control of herself quickly - she is a queen and her duty enjoins her to renounce her love. In despair, Don Carlo goes away. Filippo enters. Angry to find the queen alone, he orders the lady-in-waiting Countess of Aremberg to be immediately sent in France. The queen bids farewell to her friend and withdraws herself together with her suite. Everybody leaves but the King stops Marquis of Posa. In his conversation with the King, Posa courageously reveals the hard situation of the people and asks for support. Filippo calls him a dreamer and declares that he has decided to purify the world of the heretics. Rodrigo answers him boldly. Posa's courage makes a strong impression on the King and, instead of punishing him, he unexpectedly reveals before him his suspicions by asking him to keep watch over the queen's behaviour and in particular over her relations with Don Carlo. He warns Rodrigo to beware of the Grand inquisitor and leaves.
Scene 3
Garden at the royal palace. Night. Don Carlo expects with thrill the rendezvous which was secretly appointed to him by a note. There comes a lady with a veiled face. This is Princess Eboli who is also in love with the prince. Carlo considers her to be Elisabeth and ardently reveals her his heart overflowing with love. With a jerk, the lady takes her veil away. Eboli has learnt his inmost secret and, with the rage of a rejected woman, she threatens to take revenge on him and tell everything the King. Unexpectedly, there comes Rodrigo. He immediately grasps what has happened and threatens Eboli that unhappiness will follow her if she betrays his friend. Filled with hatred, the princess goes away. Rodrigo insists Carlo to entrust him for safe-keeping all secret documents and the letters he has received from the queen.
Scene 4
A large square in front of the cathedral. Here are going to be burnt the sentenced to death heretics, rebels and reformers. The Ladies and the Gentlemen of the Court have taken their places, the people has overcrowded the square in expectation of the forthcoming spectacle. The Grand inquisitor comes and after him comes also king Filippo with his suite. All of a sudden, in front of the King stop several Flemish deputies lead by Don Carlo. They ask Filippo to pardon the sentenced. The King chases the delegation away. Then Carlo takes out his sword; he is ready to fight for the liberation of the sentenced. The King orders to disarm him, but nobody dares to approach the heir to the crown. Marquis of Posa, seeing the danger which threatens his friend, forces him to give up his sword by personally handing the weapon over kneeling before Filippo. Don Carlo is struck by the action of Rodrigo whom he considered to be his best friend. The King proclaims Posa for duke. The celebration continues; the stake blazes rise wildly. A voice from heaven promises peace to the sentenced; the people glorify their king.
Scene 5
King Filippo's workroom. Princess Eboli has fulfilled her threat; she has stolen from the queen the box with Carlo's letters and has given it to Filippo. The King is out of his senses. He sincerely loves Elisabeth and cannot accept her infidelity. He is rapt in sorrowful thoughts about his life without love, full of worries and anxiety. There comes the Grand inquisitor. Filippo asks him what to do with his disobedient son. The cruel inquisitor proposes that he should be sentenced to death, as a heretic, together with Marquis of Posa. Filippo, however, trusts Posa and refuses to follow the advice. Then the inquisitor threatens the king with eternal curse and, enraged, he leaves the workroom. Left alone, Filippo with bitterness acknowledges before himself that he has been always forced to bend his head before the Church. There comes Elisabeth and complains that someone has stolen her casket with jewellery and other things which were valuable for her. The King shows her the box and orders her to open it. Elisabeth refuses. Filippo opens himself the box where is to be found also Carlo's portrait and, with insulting reproaches, he attacks her. Elisabeth loses consciousness. There come Eboli and Posa. Eboli is bitterly sorry for what has happened and when the queen comes to her senses, she confesses that she, rejected by Carlo, has disclosed her secret to the King. Elisabeth leaves her to choose her punishment alone - exile or monastery. Repentant, Eboli swears to save Don Carlo.
Scene 6
In the prison. Don Carlo cannot forget his friend's betrayal. All of a sudden, the door opens and in the prison enters Marquis of Posa to bid his friend farewell. At first, Don Carlo is not willing to listen to him, but soon he realizes - Rodrigo is doomed because he has taken the blame upon himself and has declared that he himself was the leader of the Flemings in rebellion. A shot could be heard. Rodrigo is wound to death; the king has ordered the execution of the sentence. Before dying, Posa asks Don Carlo to bring to an end the work they have started. He also succeeds to tell his friend that Elisabeth will be waiting for him. There comes Filippo in order to set his son free. In the prison rushes the rebelled people, but the Grand inquisitor succeeds to make everybody bow before the king. Among the crowd is also Princess Eboli who, unnoticed, manages to take Don Carlo away.
Scene 7
On her knees by the tomb of Charles V, Queen Elisabeth expects Don Carlo who will come to say a final farewell. The infante will leave for Flanders to make Rodrigo's legacy come true. They both bid farewell to each other with the hope in their hearts to meet in a "better world", but they are caught by king Filippo and the Great inquisitor. When he sees again his son by Elisabeth, seized with great anger, he hands him over to the inquisition. After a short unequal skirmish, the guards stab Don Carlo.