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In 1792, the Prince of Wales reviews his palace guards. Upon hearing the news that dozens of French aristocrats have been executed by the new French Republican government, the prince expresses his pride that a group of British royals, led by a man known only as "The Scarlet Pimpernel," have perplexed the French with their daring rescues. In a French prison, the Count de Tournay and his family prepare to be taken to the guillotine. The count is separated from his family and sent to Robespierre, the leader of the French government. His family, however, is rescued by their cart driver, who is none other than the Scarlet Pimpernel, disguised as an old hag. Safely outside Paris, the de Tournay family is met by the Pimpernel's men and spirited away to England. The Pimpernel's newest exploit enrages Robespierre, who offers the count his life if he helps capture the Pimpernel. Refused by the aristocrat, Robespierre then assigns the task to his ambassador to Britain, Chauvelin, and threatens him with the guillotine if he fails.
Back in England, the Pimpernel removes his disguise and becomes Sir Percy Blakeney, an English gentleman who appears to be nothing more than a "fop." Percy warns his friends that they must keep their band small and secret or its effectiveness will be lost. Percy's beautiful French wife, Marguerite, is unaware of the Pimpernel's true identity. Through his spies, Chauvelin discovers a note which implicates Marguerite's brother, Armand St. Just, in the Pimpernel's actions. Upon his arrival in England, Chauvelin offers Marguerite her brother's life if she assists in the capture of the Pimpernel. Meanwhile, Percy and Armand meet to discuss their future actions, and Armand questions Percy about his estrangement from his wife. Percy tells Armand that Marguerite testified against the Marquis de St. Cyr, the first aristocrat sent to the guillotine, and though he still loves her, he cannot forgive her this action. At the Granville Ball that night, Marguerite feigns illness to acquire a note from Sir Andrew ffoulkes, one of Percy's associates, which states that the Pimpernel will be in the library at midnight. With the note in his possession, Chauvelin goes to the library, only to find the sleeping Percy. Disgusted, Chauvelin then sits down and falls asleep himself, only to awaken and find a note from the Pimpernel. Though he suspects the still-sleeping Percy, Chauvelin cannot believe that such a foppish man is the hero he seeks. Later on, Marguerite tells Percy of her betrayal of the Pimpernel to Chauvelin.
When Percy questions her on her denouncement of St. Cyr, Marguerite tells him that St. Cyr had unjustly sent her to prison because his son had fallen in love with her, and that she would have died there if she had not been freed by the Revolution. While Percy can finally understand his wife's actions and the two become close once more, he still does not disclose to her his secret identity. That evening, Marguerite looks up at a family portrait, only to realize that the mark of the Pimpernel is part of the family crest. She rushes to foulkes, who tells her that Percy has already sailed for France in an attempt to rescue both her brother and the Count de Tournay.
Meanwhile, Chauvelin learns from a French prison guard that Percy has already freed Armand and de Tournay, and that his band plans to meet at the Brogard's Inn before sailing for England. Marguerite arrives at the inn before Percy, only to be captured by Chauvelin, who is there disguised as a priest. Percy arrives at the inn, and though he avoids Chauvelin's initial trap, he is forced to surrender to the French ambassador when he learns of Marguerite's plight. After saying goodbye to Marguerite, Percy is led off to face a firing squad. Chauvelin's exultation at the sounds of rifle shots is short-lived, however, as Percy returns to the inn unharmed, only to tell Chauvelin that the French soldiers were actually his men in disguise. Leaving the outwitted Chauvelin behind, Percy and Marguerite sail back to England, and Percy reminds his wife that she will never be free as long as he is alive, which will be a very long time.