Richard hears a dispute between Mowbray and Bolingbroke, each accusing the other of conspiracy in the Duke of Gloucester's murder, and decides the matter must be settled by their single combat. The Duchess of Gloucester laments over her husband's death to John of Gaunt.
Just as the contestants are about to fight, Richard halts the duel. He banishes Mowbray for life, then Bolingbroke for ten years, which he reduces to six after hearing Gaunt's pleas.
On his death-bed, Gaunt tries to get Richard to reform, but is ignored. When he dies, Richard seizes his estates to help pay for his war in Ireland. Ross, Willoughby, and Northumberland hear of Bolingbroke's return to claim his father's land, and go to join him, as do several other peers. Queen Isabel, upset at Richard's absence, is comforted by Bushy and Bagot, but they and Green decide to flee when they hear of the growing rebellion.
Bolingbroke meets the English lords who are supporting him, including Harry Percy. When York arrives, he reprimands Bolingbroke for treason. Bolingbroke protests his innocence, saying he has only come to claim what is rightfully his. Bushy and Green are captured and executed. Thinking Richard dead, the Welsh army disperses.
Richard then arrives, and when he learns of the extent of the rebellion, and the support for Bolingbroke, he retreats to Flint castle. Bolingbroke agrees to swear allegiance to Richard if his banishment is repealed and his lands are restored. Richard agrees, and they return to London. The Queen overhears her gardeners commenting on the political situation, and predicting Richard's deposition.
A quarrel breaks out among the peers over who was responsible for Gloucester's death, but this is broken off when York arrives with the news that Richard is willing to yield the throne. When Bolingbroke accepts the offer, the Bishop of Carlisle rebukes him, and is charged with treason.
Richard is summoned, and with great grief hands his crown to Bolingbroke. Charged with various crimes, he is sent to the Tower.
The Abbot of Westminster, Carlisle, and Aumerle, incensed at Bolingbroke's treatment of Richard, begin to plot against Bolingbroke. The Queen bids farewell to Richard on his way to the Tower, but he is then sent to Pomfret, while she is sent to France.
York discovers that Aumerle has a document outlining the plot against Bolingbroke, recently installed as Henry IV. Horrified, York leaves to inform Henry of the conspiracy. The Duchess encourages Aumerle to reach the King first, and beg forgiveness before York accuses him, which he manages to do.
Exton, having heard that Henry wishes Richard dead, sets off to Pomfret, where he and his associates murder him. He brings Richard's body back to London, but is not welcomed by Henry, who banishes him.
Henry then vows to go on a pilgrimage to the Holy Land to expiate his guilt.