The narrator—implied to be Twain himself—describes meeting the title character at Warwick Castle, drawn by his "candid simplicity, his marvelous familiarity with ancient armor, and the restfulness of his company" (0.1).
The Yankee (a.k.a. Hank) asks him if he knows anything about the transmigration of souls—kind of a weird question for someone you've just met, right? The narrator says that he doesn't.
The Yankee departs and the narrator avoids boredom by reading Malory (big mistake), taking in a story about Sir Launcelot killing two giants.
As the narrator sets the book down, he hears a knock at the door. It's the Yankee. The narrator sits him down, and loosens his tongue with copious amounts of booze to get him to tell his story.
The Yankee says that he was born and raised in Hartford, and that he worked as the head superintendent of an arms factory. He could make nearly anything out of metal, including guns and complex machinery.
One day, during a fight with one of the workers named Hercules, he got hit in the head with a crowbar. Um… serves him right for picking a fight with a guy named Hercules. Anyway, Hank passed out and when he woke up, he found himself sitting under an oak tree in the countryside.
A knight on horseback took him captive and led him to Camelot—turns out Hank had been transported thirteen centuries back in time.
Back in the present, the Yankee starts to nod off, so he gives the narrator his journal to read.