Arthur, Merlin and some soldiers are hunting in the forest when they hear an animal nearby. Arthur sends Merlin ahead to flush it out while they surround it. Reluctantly, Merlin plods through the thick brush and upon entering a clearing, sees a unicorn grazing. He tries to shoo it out of harm's way, but Arthur's already seen the prize. Despite Merlin's protests, he shoots it with his crossbow. The unicorn falls, and Merlin caresses its head, telling the dying beast he's so sorry. Arthur's thrilled, telling the shaken Merlin not to be such a girl about it. Behind Arthur, Merlin sees an old man in white looking at them.
Arthur proudly presents the unicorn's horn to Uther, who covets the magnificent trophy. At Gaius's look of concern, he asks what's wrong. Gaius recounts an ancient legend that says misfortune will befall whoever kills a unicorn, at wh ich Uther and Arthur scoff. Later, Merlin tells Gaius that he can't believe Arthur took pleasure in killing the unicorn, the most beautiful creature he's ever seen. Gaius says Arthur has hunting in the blood, and wishes he would have seen the unicorn as there aren't many left.
Merlin tells Arthur he shouldn't have killed the unicorn, as it was doing no harm, but Arthur's more concerned with the rat droppings underneath his bed. He tells Merlin to spend more time making sure his chambers aren't rat infested than worrying about unicorns. Uther summons Arthur to one of their grain crops, which mysteriously died overnight. Uther says all of Camelot's crops suffered the same fate, so he's asked Gaius to conduct tests to determine the cause. He orders a ration on the remaining food. Arthur's at a loss, as he rode through the fields last night and they were fine.
Gaius can't find any logical cause behind the dead crops, especially because the trees and hedges around them aren't affected, only edible crops. When Merlin suggests magic may be behind it, Gaius doesn't want to alarm Uther with that theory until he's completely certain. As the townspeople line up for their rationing of grain, Arthur tells Uther that the livestock is either dying or been eaten. When Arthur and Uther learn that their food supply's been looted, Uther orders a curfew on Camelot and authorizes the execution of anyone caught looting supplies.
The next day, things worsen when Gwen attempts to draw water from a pump that yields only sand. An investigation into the city's wells and reservoir reveal that Camelot's water supply has dried up. At that, Gaius suggests to Uther that sorcery is behind it, a theory Uther accepts. At home, Merlin unsuccessfully tries several spells to change a bucket of sand into water. Gaius, who usually cautions Merlin about using magic, encourages him this time, saying if there was ever a time to use his talents, this is it. Merlin says he's tried everything; if it is magic, it's more powerful than what he possesses.
That night, Arthur spots an old man wandering around Camelot after curfew. He and Merlin give chase but the man seems to disappear into thin air each time they're close. Finally, he appears by them and introduces himself as Anhora, Keeper of the Unicorns, whom Merlin recognizes from the forest. Arthur accuses Anhora of the evil plaguing Camelot, but Anhora says Arthur unleashed the curse when he killed the unicorn. Arthur demands Anhora lift the curse or be executed. Anhora explains that only Arthur can undo it, and to do so he'll be tested to prove his worth. However, shall he fail any of the tests, Camelot will be damned for all eternity.
At Gaius's urging, Merlin tries to convince Arthur to take Anhora's warning seriously. However, schooled well by Uther's hatred of sorcerers, Arthur thinks Anhora's lying, even after Merlin admits seeing him in the forest. Arthur's convinced Anhora will try to steal the grain reserves that night, so he and Merlin stake it out. Instead, they catch Evan, a farmer stealing a bag of grain. Evan explains his desperation at being unable to bear seeing his family starve. Despite Uther's order to execute looters, Arthur takes pity on him and lets him go, even giving him a bag of grain. Grateful, he tells Arthur that his being merciful and kind will bring its own reward.
The next day, Camelot's water supply has returned. Merlin suggests to Arthur that the farmer he let go may have been one Anhora's tests. Arthur is doubtful. After Arthur leaves, Merlin spots the rat and kills it using magic. Matters get worse when people from outlying villages flood Camelot searching for food. Arthur blames himself for not being able to provide for even the people in Camelot, much less for the new migration. Gwen manages to smuggle some bread out of the palace kitchen, which Morgana says to quietly distribute among the children and old people.
That night, Merlin serves Arthur meat stew. At first, Arthur refuses to eat while his people are starving. He asks Merlin if he really thinks he's responsible for the curse. When Merlin says yes, Arthur wants to go to the forest in the morning to look for Anhora. Merlin convinces him to eat the stew, which Arthur thinks has a strange textured mystery meat. When he realizes that Merlin has made him rat stew, he makes Merlin eat it. Morgana comes to Arthur's chambers, looking for something to eat. Both can't bring themselves to offer her rat stew.
The next morning, Arthur and Merlin look for Anhora in the forest. Arthur catches a glimpse of Anhora and gives chase, losing Merlin in the process. He encounters the farmer that he let go enjoying a hefty food supply and learns he's really a cunning thief. The thief taunts Arthur for letting him go, calling him unworthy of the throne and a failure to Uther as a son. Infuriated, Arthur attacks him. Just as he strikes the deathblow, the thief vanishes. Anhora appears and says that because Arthur would kill a man over his pride, he failed the test. Now, Camelot will suffer even more.
The next day, things indeed worsen for Camelot. Uther discovers that the city's food rations have rotted. While Gaius and Merlin choke down cooked beetles, Arthur tells Uther he's distributing the castle's food reserves to the people. Uther orders him to cut the people off and feed the army. Not wanting his people to starve, Arthur suggests Uther ask the neighboring kingdoms for aid. Uther scoffs, fearing their enemies might choose to attack, seeing they're weakened. He asks Arthur if he has no pride, wanting to beg his enemies for aid, but Arthur can't think of his pride while his people suffer. He tells Uther to give the order himself.
Merlin, seeing how despondent Arthur is over his people's suffering, finds Anhora and begs him to give Arthur another chance. Anhora tells him Arthur's only option is to go to the Labyrinth of Gedref, where he will face a final test. When Merlin asks what it is, Anhora says that only Arthur can know. Arthur travels to the Labyrinth, secretly followed by Merlin. Once inside the Labyrinth, Merlin loses Arthur and encounters Anhora. He accuses Anhora of leading Arthur into a trap, but Anhora reveals the trap is for Merlin and incants a spell that ensnares him in vines.
Arthur eventually reaches the end of the Labyrinth where he sees Anhora and Merlin. Merlin sits in front of a table where two goblets are set. Anhora says one of them contains poison, the other a harmless liquid. Anhora explains the final test: Each must drink from one goblet, and the contents of both must be drunk. At first Arthur is reluctant to go along with it, but Anhora reminds him that Camelot's fate hangs on whether he passes or fails.
After debating who will drink first -- both are willing to die for the other one -- Merlin suggests they pour both drinks into one goblet so they won't have to guess which one holds poison. Once this is done, Arthur distracts Merlin and snatches the goblet, drinking the entire contents. He collapses in front of a horrified Merlin, who begs Anhora to save him.
Anhora reveals the goblet contained only a sleeping draught, and Arthur will soon recover. He explains that in order to atone for slaying a pure-hearted unicorn, its killer must prove they are also pure of heart. By being willing to sacrifice himself to save Merlin, Arthur has proved this, and shown what is truly in his heart. He has passed the final test, and the curse on Camelot will be lifted.
Upon returning to Camelot, Arthur and Merlin see that all is back to normal. The crops have grown back, there is plenty of food and water, and the people are no longer suffering. Arthur tells Uther that the sorcerer won't be bothering them anymore. They return to the site of the unicorn's death and bury its horn, where Arthur apologizes for ending its life. To their surprise, they see the unicorn grazing nearby. Anhora explains, "When he who kills a unicorn proves himself to be pure of heart, the unicorn will live again."