Arthur, Merlin and a group of soldiers are hunting in the forests outside Camelot. They hear the sounds of an unknown animal moving about nearby: Arthur sends Merlin in to flush the creature out while he and his men surround it. However, when Merlin enters a glade, he finds a unicorn grazing. Merlin desperately tries to shoo the creature away from harm, but before he can, Arthur fatally shoots the unicorn with a crossbow. Arthur is delighted by the kill, but Merlin is unnerved by it: Arthur tells Merlin not to be so soft. However, Merlin catches sight of an old man in white walking away from the glade.
Upon his return to Camelot, Arthur presents the unicorn's horn as a trophy to Uther. Gaius warns the court of an ancient legend that states grave misfortune will befall whoever kills a unicorn: however, Uther and Arthur dismiss the warning. The next day, however, Uther calls Arthur to him: they ride to a field outside Camelot, to discover that Camelot's entire grain crop has died overnight. Uther gives the order to begin rationing the remaining food. Back in his quarters, Gaius can find no logical cause for the crop's death: however, he is reluctant to believe it is sorcery.
The situation becomes worse the next day: Merlin and Gwen attempt to draw water from a water pump, but sand emerges from the pump instead of water. An investigation of the city's wells and reservoir confirm Camelot's water supply has dried up. Gaius is forced to conclude that it is the work of magic, a theory Uther agrees with. Merlin attempts to convert the sand back into water: however, he is unable to. Merlin tells Gaius that whatever is causing this has far greater power than him. Uther orders Arthur to place a curfew on Camelot and authorises the execution of anyone caught looting supplies.
That night, Arthur and Merlin catch sight of someone wandering around Camelot after the curfew has begun. The figure evades their efforts to catch him several times before he reveals himself to them. The figure is an old man clad in white, who introduces himself as 'Anhora, Keeper of the Unicorns'. Arthur accuses Anhora of the evil plaguing Camelot, but Anhora responds it is Arthur's doing; by killing the unicorn, Arthur unleashed a curse on Camelot. Anhora explains that only Arthur can undo the curse, and that to do so, he will be tested to prove his worth: however, if he fails any one of the tests, Camelot will be damned for all eternity.
At Gaius's advice, Merlin tries to convince Arthur to take Anhora's warning seriously. Initially unbelieving, Arthur becomes more alert when Merlin admits seeing Anhora after the unicorn was slain. That night, Merlin and Arthur wait in the grain store, convinced this will be the curse's next target. Instead, they find a farmer who was trying to steal grain to feed his starving family. Despite the command to execute looters, Arthur lets him go, and gives him a small bag of grain. The farmer leaves, telling Arthur that his kindness 'will bring its own reward'.
The next day, Camelot's water supply has returned. Merlin suggests that the farmer they caught and released may have been one of the tests Anhora mentioned. The pair go back to the forest in the hope of finding Anhora and the next test. At the site of the unicorn's death, Arthur encounters the farmer he released, who it turns out, is a thief. The thief taunts Arthur, calling him unworthy of the throne and stating that he is a failure to Uther as a son. Infuriated, Arthur attacks the thief and defeats him: as he strikes the deathblow, the thief vanishes and Anhora appears. Anhora explains that because Arthur would kill a man to defend his pride, he has failed the test, and Camelot will suffer even worse.
The next day, it is discovered that all of Camelot's food rations have rotted. Arthur, morose, is ordered by Uther to give the order to stop distributing food to the people so the remaining supplies can be given to the army. Arthur refuses and suggests Uther ask the neighbouring kingdoms for aid: Uther refuses, fearing the kingdom's enemies would use this time of weakness to attack, and asks Arthur if he has no pride in wanting to beg his enemies for aid. Arthur responds that he cannot think of his pride while his people suffer, and tells Uther to give the order himself.
Merlin, realising how desperate Arthur is to help, goes back to the forest, seeking Anhora. He begs Anhora to give Arthur a final chance: Anhora tells him the only chance is for Arthur to go to the Labyrinth of Gedref, where he will face a final test, one only Arthur can find out. Arthur sets out for the Labyrinth, followed in secret by Merlin. In the Laybrinth, Merlin and Arthur become separated. Merlin encounters Anhora and rages indignantly that Anhora is leading Arthur into a trap. Anhora shadowily announces the trap is for Merlin himself and incants a spell that makes roots tie Merlin up.
Arthur eventually reaches the Labyrinth's end: Anhora and Merlin are already there. Merlin's hands are still tied and he is fastened to a chair. A table is set up with two goblets on it: one containing poison, the other harmless. Each can only drink from one goblet, and the contents of both must be drunk. Merlin deduces that they pour both goblets into one so they do not need to guess which one holds poison: once this is done, Arthur distracts Merlin and drinks the goblet, after which he collapses. Anhora tells the distraught Merlin 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 their return to Camelot, Arthur and Merlin are met by Gaius, who tells them everything has returned to normal: the crops have regrown, there is plenty of food and water, and the people are no longer suffering. Arthur and Merlin return to the site of the unicorn's death and bury its horn. However, as they leave, they see the unicorn grazing nearby. Anhora explains to them that "when he who kills a unicorn proves himself to be pure of heart, the unicorn will live again..."