It is the eighth year of the Grecian seige of Troy, a war brought about when the Trojan Paris abducted Helen, the most beautiful woman in the world, from her Greek husband, Menelaus. However, because the war is at a stalemate, Troilus, youngest son of King Priam of Troy, is spending most of his time wooing the beautiful Cressida and has engaged her voyeuristic Uncle Pandarus to arrange a meeting with her. However, Cressida pretends indifference, thinking that doing so keeps Troilus's interest active.
Enthusiasm for the drawn out war is waning on both sides. Achilles, the great Greek champion, refuses to fight and has withdrawn to his tent. Ulysses accuses Achilles of insubordination, to no avail, then tries to entice Achilles back to the field by arousing his jealousy against fellow warrior Ajax, whom he acclaims as the new Grecian hero, also to no avail. On the other side, the Trojan leaders are disputing the value of even continuing the war, merely for the sake of Helen. The greatest Trojan warrior, Hector, declares her not worth the lives she has cost, but abruptly abandons this argument to support his brother Troilus's view that honor demands they continue to fight for her.
Thus, Hector sends a challenge to the Greeks to choose one soldier to meet him in single combat. Determining that the challenge is really meant for Achilles, the Greeks contrive to have the "dull, brainless Ajax" accept the duel with the great Trojan, hoping, fruitlessly, to spur Achilles to action.
In the meantime, Pandarus has arranged a tryst between Troilus and Cressida. Troilus quickly wins her heart and body, and the two exchange tokens of their vows of eternal love and fidelity. However, their plan to live together fails when Cressida's father, Calchus, who has been traitorously serving with the Greeks, arranges for an exchange of a Trojan prisoner-of-war for Cressida. The Grecian Diomedes is sent to bring Cressida back to the Greek camp. The lovers bewail this stern necessity of war and part after many protestations of fidelity.
Diomedes, openly admiring Cressida's beauty, arrives with her at the Greek camp just as the duel between Hector and Ajax is beginning. With her vows to Troilus scarcely uttered, Cressida bestows a round of kisses on the Greeks; Then the chivalric duel between Ajax and Hector ends in a draw, and the Trojan and Grecian leaders depart for a friendly feast in Achilles' tent.
After the feast Troilus asks the Greek Ulysses to lead him to the tent where Cressida is confined, and there he is deeply mortified to watch from his hiding place as Cressida betrays him and is seduced by Diomedes—Cressida even giving to her new lover the token which Troilus had given her earlier.
In the fierce fighting the next day, stung by such perfidy, Troilus engages Diomedes in combat, but without serious results for either. Meanwhile the Trojan Hector has also gone forth to battle again, disregarding the ominous predictions of his sister, Cassandra, and his wife Andromache. Hector kills Patroclus, intimate friend of Achilles, which finally arouses Achilles from his moody lethargy. Achilles takes to the field, and, finding Hector unarmed and resting, has him slain in defiance of all honor. Achillles then drags Hector's body around the city tied to his horse's tail.
With the war boiling again but far from over, Aeneas sadly leads the Trojan forces from the field, Troilus despairs of love and even any value in life, and Pandarus is left to lament his miseries and pass his diseases and unhappiness onto future generations.