Don José is a handsome, young cavalryman from Navarre. The son of a good Basque family, he has excellent chances of being quickly promoted and making his name as a soldier. A short time after arriving at his post in Seville, however, he happens to meet a beautiful, clever young Gypsy named Carmen. Don José falls in love with her at once and allows her to escape after she was taken into custody for attacking another worker with a knife in a cigarette factory.
One night, she persuades him to desert his post and go with her. He is punished by being ordered to stand guard. When she goes to him again, and again urges him to come with her, he refuses. They argue for more than an hour, until Don José, exhausted by his struggle between anger and love, succumbs to her. After he becomes her lover, she caresses him and ridicules him by turn. Carmen is independent, rebellious, and tormenting. The more fickle she is, the more madly Don José loves her.
One night, having agreed to a rendezvous with Carmen, he goes to her apartment. While they are together, a lieutenant who is also Carmen’s lover enters. He and Don José begin to argue and swords flash. In the struggle, Don José kills the lieutenant after himself suffering a head wound. Carmen, who remained in the room throughout the fight, accuses Don José of being stupid. She goes out and returns a few minutes later with a cloak, which she tells him to wear, as he will be a hunted man. Don José’s hopes for a brilliant career are shattered as a result of this impetuous act. His love leads him to murder, and he is doomed to live the life of an outlaw with a woman who is a pickpocket and a thief.
Carmen has many friends and acquaintances who are outlaws. Because Don José has no choice in the matter, he agrees to go with her to join a small band of smugglers and bandits for whom Carmen is a spy. By that time, a reward is posted for Don José’s capture. He and Carmen set out and eventually find the smugglers. For a long time, Don José lives with them, throwing himself into his new, lawless life with such vigor and enthusiasm that he becomes known as a desperate and ruthless bandit. All the time, however, he is deeply unhappy. By nature, he is kind and has nothing of the desperado in him. His wild life is not the type of existence he envisioned. Worst of all, he knows that Carmen is unfaithful to him, and he grows silent and sullen.
His anger and jealousy increase when he discovers that Garcia, the one-eyed leader of the gang, is Carmen’s husband. By that time, the band is reduced in numbers. One day, while Carmen is absent, Don José kills Garcia. A fellow outlaw tells Don José that he was very stupid and that Garcia would have given Carmen to him for a few dollars. When Carmen returns, he informs her that she is a widow. The death of Garcia also means that there are only two of the band left on the eve of a dangerous raid they planned.
Don José and a smuggler named Dancaire organize a new band. Carmen continues to be useful to them. She goes to Granada, and there she meets a toreador named Lucas. Jealous of his rival, Don José asks her to live with him always, to abandon the life they are leading, and to go off with him...
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to America. Carmen refuses, telling him that nobody ever successfully orders her to do anything, that she is a Gypsy, and that she reads in coffee grounds that she and Don José will end their lives together. Her words half convince Don José that there is no reason for him to worry.
A short time later, Carmen defies him again and goes to Cordova, where Lucas is appearing in a bullfight. Don José follows her, but he catches only a glimpse of her in the arena. Lucas is injured by a bull. Outside the arena, Don José meets Carmen. Once more he implores her to be his forever and to go with him to America, but she only laughs and jeers at him.
Don José goes to a monk and asks him to say a mass for a person who is in danger of death. He then returns to Carmen and tells her to follow him. She responds that she will go with him, even to her death, though she knows that he is about to kill her. Resigned to her fate, she tells him that she no longer loves him and that she will not love him any more even if Lucas does not love her. Their affair ends. In desperation, Don José takes out his knife and kills her. With the same knife, he digs her grave and buries her in a grove of trees. Then he goes to the nearest constabulary post and surrenders. The monk says the mass for the repose of Carmen’s soul.