Act I

In the prologue, the Prince, as a child, is awakened by a nightmare of a swan. The Prince's mother comes in to comfort him, but becoming nervous by the situation's intimacy, leaves.

Scene 1 opens with the Prince being prepared for a day of official duties by chambermaids and valets.

In Scene 2, arrayed in his full dress uniform, the Prince becomes bored by a boat christening, a ribbon cutting, and other official tasks. His mother prods him to keep up appearances, even as she devotes more attention to the soldiers than she does to him. During this scene, there is a transition from the child actor playing the young Prince to the identically-dressed adult dancer who portrays the grown Prince. This now-adult Prince is introduced to a girl called "the Girlfriend". Although the girl seems foisted on him by von Rothbart, the Private Secretary,^{[lower-alpha 1]} the Prince prefers her to his duty-bound life.

In Scene 3, the Queen, one of her admiring soldiers, the Private Secretary, the Prince, and the Girlfriend all appear in a theatre box, where they watch a ballet that is staged for the actual audience as well as for the characters. The ballet's backdrop (from a design for Castle Falkenstein by Christian Jank), ornate costumes, and acting parody the romantic ballets of which the original Swan Lake was an example. The Girlfriend's responses to the dance as well as her eventual dropping her purse from the royal box annoy the Queen and von Rothbart.

Scene 4 finds the Prince drinking in his private chambers in front of a mirror, to his mother's shock. A nearly violent pas de deux ensues in which he pleads for her attention and love, while she rebukes him.

The Prince then goes into the streets and into the Swank Bar, a 1970s-style disco, in Scenes Five and Six. Here is where the choreography veers from classical ballet, with jazz forms and modern dance dominating. The Prince gets into a fight with sailors at the bar, and he is thrown out into the street. In Scene Seven, he sees the Girlfriend being paid off by von Rothbart, and he is totally shattered to discover that the only person who appeared to love him is a fake. This increases his desperation and he vows to kill himself.

While sitting in the street at the end of Scene Seven the Prince imagines a group of swans flying towards him but the vision disappears. It is the first flash of the Prince's descent into mental turmoil.

Act II

Distraught and disappointed that he will never find affection, the Prince writes a suicide note and goes to throw himself into a lake at a public park inhabited by swans. He is saved by a vision in which he encounters the lead Swan, who had appeared to him in his dreams. Initially rejected by the lead Swan, the Prince is gradually accepted and taken into the Swan's arms. The Prince is elated and abandons his plan to kill himself. This Act contains the most talked-about element of the ballet in which bare-chested, barefoot male dancers play the swans, and it contains a very sensual pas de deux between the lead Swan and the Prince.

Act III

Scene 1 begins with princesses from various European nations and their escorts arriving at the palace gates for a grand ball. The Girlfriend sneaks in amongst them.

Scene 2 takes place in a ballroom. It commences with the arrival of the Queen and the Prince and some formal dancing, but quickly degenerates into a debauched party of drinking and lascivious come-ons. Into this arrives the charismatic and sexually aggressive son of von Rothbart,^{[lower-alpha 2]} the Private Secretary, in black leather trousers, who intensifies the sexual tension even further by flirting with every woman present, including the Queen. Each woman finds herself drawn to him and actively participates in the mutual, sometimes lewd, flirtation.

Just as in the original Swan Lake, where customarily (although not always) one ballerina performs the roles of both the white swan (Odette) and the black swan (Odile), the same ballet dancer performs the white Swan and the black-clad young von Rothbart in this version. The Prince sees something of his beloved Swan in the son, and he is very attracted to his bravado and animal magnetism but shocked by his lewdness, especially towards his mother. During bump and grind group numbers and a sequence of national dances, it becomes clear that the Queen is powerfully attracted to von Rothbart's son. His father, the Private Secretary, looks on with an increasingly triumphant approval. The Prince also tries to approach young von Rothbart, only to be rebuffed. The Prince retreats into his mind and imagines dancing intimately with him, but the Prince's confusion interrupts the fantasy, and the son's movements turn from love to violence.

The Prince imagines the Queen and young von Rothbart flaunting their growing physical affection for each other. They join with the other guests at the ball to laugh and ridicule him because of his growing distress. The Queen and young von Rothbart end their dancing with an embrace and passionate kissing. The Prince, in his fury, violently separates them and is rewarded by outrage from both and a slap from his mother. Overwhelmed by conflicted feelings, the Prince produces a pistol and threatens to shoot his mother. In an ensuing scuffle the Girlfriend tries to dissuade the Prince, while the Private Secretary draws a pistol and points it at the Prince. As shots ring out, the Girlfriend and the Prince fall to the ground, but only the Girlfriend has been hit. She lies unconscious and the Prince is dragged away, while the Queen throws herself into young von Rothbart's arms. He gives the pistol he had taken from the Prince to his father, the two of them laughing.

The plot has evolved over the years since the debut. The most conspicuous change Bourne made was to remove the subplot of the von Rothbart conspiracy to put his son on the throne. The Private Secretary now becomes just a functionary (no longer a von Rothbart counterpart, nor villain) and the Stranger is no longer shown conspiring with him. The identity of the Stranger becomes even more vague and Bourne prefers to leave him and his relationship with the Prince up to the individual interpretation of the viewer.

Act IV

In the final act, the Prince, regarded as having lost his mind, is confined to an asylum in a room with a high barred window, and is treated by a doctor and a team of nurses wearing masks that resemble the Queen's face, in a scene reminiscent of his dressing at the beginning of the ballet. The Queen visits but, again, she is still unable to fully express love for her son.

The Prince crawls into bed and appears to sleep. However, he begins writhing as he dreams of the troupe of swans emerging from under and behind, dancing around him. He wakes from his nightmare, checking under his bed and around his room for swans. His tortured expression and jerky movements convey the Prince in turmoil. His lead Swan then slowly emerges from within the Prince's bed. The Swan dances with the Prince and assures him of his continued affection. But, the rest of the swans turn on the lead Swan when he makes it clear that he values his relationship with the Prince more than he does them. They separate the two and begin attacking the Prince before the Swan leaps in to save him. The Swan embraces the Prince and envelops him in his wings. The swans' fury increases and their next attack dismembers the Swan, who then disappears. Heartbroken and despondent, the Prince wails and collapses onto the bed. The Queen then finds her dead son's body and breaks down in sobs. However, in death the Prince and the Swan are reunited, as shown by a tableau depicting the lead Swan tenderly holding the young Prince in his arms.