Santiago, the protagonist, is a shepherd. He sleeps in a church where a sycamore tree grew where the sacristy once was. Santiago dreamt twice that a child is playing with his sheep and then takes him by the hand and brings him to the Pyramids of Egypt to show him the location of a hidden treasure.
He decides to go to a gypsy fortune-teller to help him decipher the dream. Santiago always wakes up just before the child to reveal the exact location of the treasure. The gypsy says that he has to go because if it is a child that tells, it exists.
An old man, who calls himself Melchizedeck, the king of Salem, tells Santiago that it is his Personal Legend or his purpose to live. Melchizedeck tells him a wonderful story about a man who found true happiness by fulfilling his Personal Legend.
Santiago decides to travel to Africa. He sells his sheep and goes to Tangier, where he is robbed. Losing hope, he decides to walk about the city; up in a hill, and finds a crystal shop. The Arab merchant says that every person''s fate is written.
After almost a year, the boy decides to leave the crystal shop since and to fulfill his personal legend - to find his treasure.
He joins a caravan going to the desert. In the caravan, the boy meets an Englishman who for ten years has searched for true alchemists. The Englishman has many books on alchemy. Santiago reads the Englishman''s books and learns about alchemy.
There is an Alchemist watching the caravan enter and thinks that the omens had told him his disciple was arriving with this caravan. The alchemist tells the boy that he will never be happy unless he fulfills his Personal Legend.
Santiago decides to leave the oasis with the Alchemist in pursuit of his treasure. While traveling through the desert, the boy learns from the Alchemist. He learns that each person who fulfills his personal legend enhances the Soul of the World, and that the world is just here to show God''s glory.
When Santiago arrives at the pyramids he falls to his knees and cries, where his tears have fallen he sees a Scarab Beetle digging in the sand. Santiago starts digging in the sand but finds nothing.
Another man tells the boy of a recurring dream in which he had seen a treasure in an abandoned church where shepherds and their sheep slept, hidden under a sycamore tree growing where the sacristy once was. The boy, who slept in this church as a shepherd himself at the beginning of his adventures, returns and finally found the treasure.