The opera takes place in Seville, Spain, and surrounding hills around 1820
It’s a blistering hot day in sunny Seville, Spain. Hot and tired, a group of soldiers hang out watching people go by. The shy, pretty Micaela comes looking for Corporal Don José, but he’s not there. The soldiers try to get Micaela to stay by flirting with her, but she leaves. Soon after, Don José arrives as the guards change shifts. A bell from the cigarette factory chimes, and the women come out for their smoke break. The men flirt with the factory girls, too. Carmen comes in last, and everyone is drawn to her, except Don José. Seeing a challenge, the Romani sets her eyes on him and sings, "Love is a rebellious bird that no one can tame” and throws a flower at Don José. Laughing, she and the other women return to the factory. He hides the flower in his uniform. Micaëla returns with a letter from Don José’s mother, who begs him to marry Micaëla. As he reads the letter to himself Micaela leaves. Suddenly, horrible screams come from the factory. Carmen has gotten into a fight with another girl and slashed her face with a knife. Lieutenant Zuniga questions Carmen, but her only reply is the mocking response “tra-la-la.” Don José is ordered to guard Carmen while Zuniga gets a warrant for her arrest. Alone with Don José, Carmen seduces him into making a plan that will let her escape. Zuniga returns with Carmen’s formal arrest orders. As she’s being led away to prison, Carmen pushes Don José and escapes through the confused crowd.
A few months later, Carmen and her friends Frasquita and Mercédès have fun singing and dancing for the soldiers late at night in Lilias Pasta’s tavern. Carmen hears that Don José, who was sent to prison because he let her escape, got out the day before. The famous bullfighter Escamillo arrives, and everyone is star struck. He sings about his adventures in the bullring and flirts with Carmen, but she’s not interested. The soldiers and Escamillo leave as the smugglers Dancaïre and Remendado join Carmen, Frasquita and Mercédès. They need to deliver their smuggled loot and want the three women to join them. Carmen says she can’t go because she’s in love. Nobody believes her as Don José’s voice is heard outside. They leave Carmen and Don José alone. He tells her how much he loves her. A trumpet signals that the soldiers must report back to the barracks. Don José says he must leave, but Carmen mocks his loyalty to the military. Don José proves his love by pulling out the flower she threw at him at their first meeting. That’s not enough for Carmen; she wants him to ditch the army and join her Romani life. Don José tells her he could never leave the military. Zuniga shows up to see Carmen and orders Don José to leave. José refuses and draws his sword. Before their fight progresses, the smugglers burst in and tie up Zuniga. Don José has no choice but to flee with the Romani.
Late at night in a deserted place outside of Seville, the smugglers carry their goods through the mountains. Carmen’s love for Don José is fading and the two bicker. She tells him to go home to his mother. Frasquita and Mercédès read their fortunes in cards, but when Carmen tries, she only sees her death and Don José’s. The women join the smugglers on their trip to the city to distract any guards. Don José stays behind to watch the camp. Micaëla has found her way to the smugglers’ site. She will take Don José away from Carmen. Afraid, she hides after seeing Don José shoot his gun. The bullet has barely missed Escamillo who is there to see Carmen. The Toreador claims the two of them are in love. Don José challenges him to a duel, but the fight is cut short when the smugglers return. After Escamillo leaves, Remendado finds Micaëla hiding. She tells Don José that his mother is dying. As Don José rushes off with Micaëla, Escamillo’s voice is heard in the distance.
Outside the bullfighting ring in Seville, the street sellers are busy hawking their wares. Zuniga tells Frasquita that an order has been issued for Don José’s arrest, although he has yet to be found. The crowd cheers Escamillo as he enters, and he and Carmen express their love for each other. As the throng enters the arena, Frasquita warns Carmen that Don José is somewhere in the crowd. Carmen says that she is not afraid and stays behind to confront him. Disheveled and crazed, he comes out of the shadows and begs Carmen to start a new life with him. Carmen says everything is over between them. Carmen tries to go into the arena and Don José blocks her way. Carmen says she’s in love with Escamillo. Enraged, Don José stabs Carmen and she falls to the ground dead. The crowd exits the arena with a victorious Escamillo to find Don José standing over Carmen’s lifeless body.