Godfrey, having learned of Balian’s recent losses, attempts to persuade Balian to join him as they travel to Jerusalem. Balian refuses, and after resupplying and resting, the Crusaders ride on.

Shortly afterwards, the corrupt town priest (Balian’s half-brother) reveals that his wife’s body was beheaded before burial (a customary practice in those times for people who committed suicide, to ensure the soul cannot enter heaven) and he has taken the crucifix she wore. Enraged at these insults, Balian slays the priest with the sword he is working on and takes the crucifix necklace of his dead wife. Balian decides to follow his father after all.

Shortly after he catches up to his father, soldiers from the village arrive to arrest Balian. Godfrey refuses to hand him over and though they win the ensuing fight, Godfrey is wounded by an arrow. Though he is not killed outright, it becomes clear as their journey continues that he will soon die.

In Messina, on the brink of death, Godfrey knights Balian and orders him to serve the King of Jerusalem. He shares with Balian his vision of “a kingdom of conscience, morality, and righteousness in the Holy Land”, where Muslims and Christians can peacefully coexist, before finally succumbing to his injuries. On Balian’s subsequent journey to Jerusalem, his ship is hit by a storm, leaving Balian as the sole human survivor of the wreck. A horse also survives but runs away as Balian tries to mount it. Tracking the horse into the desert, Balian soon finds himself confronting a Muslim cavalier, and his servant, over possession of the horse. Balian slays the horseman in single combat, but spares the servant, asking him to guide him to Jerusalem. Upon their arrival in Jerusalem, Balian releases his prisoner who then tells him the name of his slain master, and Balian says that he will pray for his soul.

Balian goes to Golgotha, where Christ was crucified and buries his wife’s necklace. Balian is accepted as the new Lord of Ibelin. He meets Jerusalem’s key players. King Baldwin IV, stricken by leprosy yet nevertheless is a wise and most sensible ruler; Tiberias, the noble but cynical Marshall of Jerusalem; Princess Sibylla, King Baldwin IV’s sister; and Guy de Lusignan, Sibylla’s scheming, bloodthirsty, and intolerant husband.

Baldwin engenders respect from the combined Christian and Muslim population of Jerusalem, yet Guy, who is determined to rule after Baldwin’s inevitable early death, seeks to precipitate a war that will allow him to dispose of the Muslims and claim the Kingdom for Christians. He is also threatened by Balian, who he sees as a rival and who, unbeknowst to Guy, has an affair with Sybilla.

Guy and his co-conspirator Raynald of Châtillon massacre a Muslim trade caravan. Saladin, leader of the Muslim forces seeking to retake Jerusalem, attacks Raynald’s castle, Kerak, to bring him to account for his crime. Balian decides to defend Kerak castle from Saladin’s cavalry, in order to protect the innocent villagers surrounding the castle.

Though outnumbered, Balian and his knights charge Saladin’s cavalry, allowing the villagers time to flee to the castle; Balian’s cavalry is soon routed resulting in the capture of him and his men. In captivity, Balian encounters the ‘servant’ he freed, Imad ad-Din, learning he is actually one of Saladin’s Generals, who then returns the favor, freeing Balian to Kerak.King Baldwin IV then arrives with his main army, and successfully negotiates a Muslim retreat with Saladin and averts a bloodbath. At Saladin’s camp, several of his Generals are angry that he made a truce, but Saladin dismisses these complaints as a foolhardy rush to war; he will only launch an attack against Jerusalem after ample preparation, when he feels he is strategically strong enough. Baldwin beats Raynald and orders his arrest, but the stress of the events causes him to collapse, and his physicians discover he will die shortly.

Baldwin attempts to pair Balian to Sibylla, knowing that the pair have affection for each other, but Balian does not accept as he refuses to be associated with the necessary murder of Guy; such political intrigue being counter to Balian’s morality. After Baldwin finally dies, Sibylla succeeds her brother and therefore names Guy as her King Consort of Jerusalem. Guy, now free to do as he pleases, releases Raynald, unsuccessfully tries to have Balian killed by several of the Knights Templar and has Raynald provoke Saladin to war by murdering Saladin’s sister. Saladin sends an emissary to demand the return of his sister’s body, the heads of those responsible, and the surrender of Jerusalem. Guy answers by cutting the emissary’s throat, nearly causing a fight between Tiberias’ knights the Knights Hospitaler against the Knights Templar.

As the emissary’s body is towed away, Guy whispers arrogantly “I am Jerusalem.” Subsequently, in their arrogance, they march to the desert without adequate food and water to fight Saladin, leaving Jerusalem unguarded except for Balian, his personal knights and the townspeople.

Saladin’s army ambushes Guy and Raynald and the Crusader army is annihilated. Guy and Raynald themselves are captured; Saladin has Raynald executed, and then marches on Jerusalem.

Balian prepares the defences, challenging the Patriarch’s advice to flee, and then makes a symbolic gesture by knighting a number of men-at-arms to raise morale. Balian insists that their goal is to defend Jerusalem’s population, not the city itself. Knowing full well they cannot defeat the Saracens, the defenders’ only hope is to delay their enemies long enough for them to negotiate.

Saladin’s siege of Jerusalem is three days of battle wherein Balian demonstrates tactical skill in knocking down siege towers, before inspiring the defenders to hold the line when a section of city wall is opened. Having proven their resolve, Saladin offers terms: Balian surrenders Jerusalem to Saladin when Saladin offers the inhabitants’ safe passage to Christian lands. In the marching column of citizens, he finds Sibylla, and convinces her to come with him.

Later, Balian is back in his French village. A column of crusader knights rides through, led by King Richard I of England, who tells Balian that they are commencing a new Crusade to retake Jerusalem from Saladin. King Richard seeks Balian, the defender of Jerusalem, to join him, but Balian answers that he is only a blacksmith.

After visiting the grave of Balian’s first wife, he and Sibylla ride into the sunset.

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