It's Venice, 1596, and despite being the most liberal European city, there's still intolerance toward Jews there. Not only must they wear caps that identify their ethnicity, but they're also locked into a ghetto at night. And since they're not allowed to own any property, most -- such as Shylock (AL PACINO) -- have resorted to becoming moneylenders despite that also being against the law.
His latest client is Christian shipping merchant Antonio (JEREMY IRONS) who borrows money from Shylock so that his handsome young friend and part-time/casual lover, Bassanio (JOSEPH FIENNES), can travel to the far off land of Belmont in hopes of impressing the beautiful and quite wealthy Portia (LYNN COLLINS). Many suitors have tried to solve her late father's puzzle that would grant them permission to marry her, but all have failed so far.
Shylock agrees to loan the money, but with the stipulation that should Antonio -- who earlier spat on him with racist intent -- default for any reason, Shylock will get what's due back to him in the form of one pound of Antonio's flesh. The merchant sees no reason to worry as he has several ships headed back to port, and so he gives the money to Bassanio who travels to Belmont with his friend Gratiano (KRIS MARSHALL). There, they meet the fair Portia and her lady-in-waiting, Nerissa (HEATHER GOLDENHERSH), who's soon smitten with Gratiano.
Back home, things are looking bad for Antonio as news arrives that his ships are lost and thus so are his chances of repaying Shylock. Enraged by his client's earlier behavior and the fact that his own Jewish daughter, Jessica (ZULEIKHA ROBINSON), has run off with Bassanio's Christian friend, Lorenzo (CHARLIE COX), Shylock is ready to enact his revenge and collect his pound of flesh.
When Bassanio learns of his friend's pending fate, he races back -- with Portia's money -- to repay Shylock and spare Antonio injury and possible death. Yet, with Shylock intent on vindication, the stage is set for a judicial showdown where various relationships and Antonio's life are on the line.