We meet a wealthy older man named Alonso Quixano, who is really obsessed with adventure fiction. He's so into it, in fact, that he dresses up as a knight one day and rides off into the countryside fixing to pick fights with giants and monsters. He also gets himself a sidekick named Sancho Panza, and the two of them ride around looking for—and often finding—dangerous situations. For the most part, they both get creamed on a regular basis. It's only when the curate and the barber from Don Quixote's village trick Don Quixote that he returns home for some much-needed bed rest.
When Part 2 of the book opens, a university grad by the name of Sansón Carrasco decides that he wants to have a little bit of fun with Don Quixote. So he visits the guy and suggests that he go to the city of Zaragoza to enter a fighting tournament. Don Quixote accepts the challenge and saddles up to go back out into the world in search of adventure. This time around, though, he has to deal with the fact that some books about him have been published and are circulating around Spain. That means that people know about his crazy antics and are eager to mess with him. Because, you know, people are bored.
Act II proceeds in a way similar to Act I, except the ante gets upped when a Duke and Duchess pour all of their power and wealth into creating elaborate fantasies around Don Quixote's adventures. They even make Sancho Panza into the temporary governor of a Spanish town. Act II only draws to a close when the bachelor Sansón Carrasco defeats Don Quixote in a duel and makes him promise to give up being a knight for at least a year. Don Quixote has no choice but to fulfill his promise and heads home.
In Act III, Don Quixote and Sancho come across a few final adventures during their voyage home, which include witnessing the fake resurrection of a young girl and getting stampeded by a herd of pigs. When they finally arrive home, Don Quixote falls ill with a fever and never recovers. In his final moments, he regains his sanity and renounces all knight adventure books. He also feels sorry for all of the trouble he has caused during his wacky adventures. He makes it all good, though, by writing his will and ensuring that the people he loves are taken care of when he's gone.