The teenaged warlock Merlin is sent to the bustling kingdom of Camelot by his mother, to work as an apprentice under the tutorage of Gaius, the court physician. On his arrival, he witnesses the execution of a man accused of sorcery as the tyrannical King, Uther Pendragon, has forbidden sorcery on pain of death. The executed man's mother, a sorceress, vows revenge on Uther and promises to kill Uther's only son, Prince Arthur.

That night, Merlin hears a mysterious voice calling him and he discovers Kilgharrah, a great and powerful Dragon, bound and shackled down in the dungeons by Uther. Kilgharrah tells Merlin him and Arthur share a destiny and Merlin must protect Arthur until the young Prince becomes King and unites the land of Albion, restoring magic.

The dark sorceress Nimueh casts a spell on a dragon egg which she throws into the castle's water supply. The next day, people start dying of a plague which turns their skin white with dark blue veins. Uther believes it to be the work of magic and orders Arthur to search Camelot for the sorcerer. When Gwen's father exhibits symptoms, Gaius warns Merlin a sudden recovery will arouse suspicion, but Merlin cures him with magic anyway.

While Camelot prepares to celebrate peace with Mercia's visiting ruler King Bayard, a priestess named Nimueh forges a poisoned chalice and replaces it with one due to be given to Arthur. She then disguises herself and plants suspicion in Merlin's mind about Bayard's true intentions.

After Merlin accuses Bayard of trying to poison the Prince, Uther forces Merlin to prove his word by drinking from the goblet, not caring if he dies. Despite Arthur's protest, Merlin drinks from the goblet and is poisoned, collapsing. Bayard is framed and imprisoned, whilst Gaius deduces the only antidote is from an incredibly rare flower, which only grows in certain caves.

Uther sternly forbids Arthur from undergoing the perilous journey, especially for a 'disposable' servant like Merlin. Despite his father, Arthur bravely rides out to find the flower and, even though Nimueh deliberately leads him into the paths of deadly monsters, he succeeds and brings the flower back to Camelot.

Merlin is saved by Lancelot, a kindhearted and loyal warrior after being attacked by a griffin. Learning Lancelot's dream is to become a knight and grateful for his rescue, Merlin brings him to court and magically forges proof of nobility so that he can apply. Lancelot's skills means he passes hazing and close combat tests against Arthur, but Uther discovers he is not noble-born and Lancelot is jailed.

The Black Knight arrives to interrupt Arthur's coming-of-age celebrations and throws down the gauntlet to any knight who will fight him. He kills them all one by one. Gaius discovers that he is Uther's dead brother-in-law, summoned from the grave by the witch Nimueh. He is seeking revenge for the death of his sister, who died giving birth to Arthur by way of magic from Nimueh. Merlin learns from the Great Dragon that only a special sword (Excalibur), burnished with the Dragon's fiery breath, can kill the knight. The Dragon warns Merlin that only Arthur can wield it. Arthur is next to fight the Black Knight, but Uther takes Excalibur and faces the knight himself, slaying him in the end. Now that the sword has been wielded by someone other than Arthur, it is capable of being used for evil; to prevent that, the Great Dragon instructs Merlin to hide Excalibur far from the reach of mortal men.