The story takes place during the 17th century in the Spanish Empire. Diego Alatriste is a soldier in the service of King Philip IV of Spain during the Eighty Years' War. The story begins in the Spanish Netherlands, where his tercio fights in the Dutch Revolt. His friend Lope Balboa is killed during the fighting, and Alatriste returns to Madrid where he takes Lope's young son Íñigo into his care.
Alatriste is hired along with a Sicilian assassin named Gualterio Malatesta to kill the Prince of Wales (the future King Charles I of England) and his companion, the Duke of Buckingham. The job is contracted by Emilio Bocanegra and Luis de Alquézar (uncle of Íñigo's love interest, Angélica de Alquézar). Alatriste finally returns to the Netherlands in 1624 (although the movie states 1625) and participates in the final battles leading to Breda's surrender. After returning to Spain, Íñigo wants to elope with Angélica, but she gets cold feet at the last moment. Alatriste has a romance with actress María de Castro. Because she was disappointed that she failed to marry him, she became the lover of Philip IV. Alatriste ends up crossing swords with Guadalmedina, a friend of the king. In the end, the object of their attention falls ill with syphilis. The duel with his friend Martín Saldaña and the punishment of Íñigo in the galleys are part of the film's spectacular ending.
The plot of the film has elements from each of the five books published up to the premiere, and it maintains the same storyline for the main characters. It includes excerpts from the future books of the saga.