In a crypt below Camelot, Nimueh performs necromancy on a sealed sarcophagus, chanting an incantation, which she ends with the words "Uther Pendragon". The sarcophagus bursts open, opened from the inside by a gauntleted fist, and its occupant roars in fury while a delighted Nimueh looks on.
Back at Camelot, Arthur comes of age and is crowned by his father as "Prince of Camelot", when a black clad knight, mounted on a black horse bursts into the hall through the window. The knight casts his gauntlet onto the ground as a challenge which is taken up by Sir Owain. The knight states the rules; single combat at noon to the death before galloping out. Gaius claims to Merlin he doesn't know the knight, but he and Geoffrey of Monmouth recognize the crest and realize that the knight is Tristan Dubois. Gaius immediately goes to tell Uther who already knows; however, Uther refuses to believe it is him, as Tristan Dubois was killed by Uther 20 years ago, and as Uther is quick to point out, "Dead men do not return".
The next day, Arthur attempts to teach Sir Owain how to fight when Guinevere comes in with a token from Morgana. Sir Owain and the Black Knight then fight; in the duel, Sir Owain manages to stab the Black Knight in the chest, with no visible damage. The Black Knight then finishes off Sir Owain before issuing another challenge. Uther holds back Arthur from taking it, allowing another knight, Sir Pellinore to take up the challenge. Arthur then confronts Uther about why he held him back. Uther justifies it saying that they should allow the other knights a chance to prove themselves and that Arthur is not to blame. In the aftermath of the fight, Merlin tells Gaius Owain landed a mortal blow and the Black Knight should by rights be dead. Gaius suggests that perhaps he already is.
Merlin and Gaius go to Tristan's crypt to discover that someone had already broken out of the sarcophagus. Back at Gaius' room, it is revealed that Tristan is the brother of Igrayne, Uther's wife and Arthur's mother. Tristan, blaming Uther for the death of his sister in childbirth, rode to Camelot and confronted Uther, challenging him to single combat. Uther managed to kill Tristan in the ensuing battle, but with his dying breath, Tristan swore he would return to Camelot one day and take his revenge. At the time, the threat was dismissed as the ranting of a dying man, but now Gaius fears the worst. Gaius suspects that sorcery was involved in bringing him back from the dead: magic was used to harness the grief and rage of a demented soul, thus bringing it back to life as a wraith. When Merlin asks how they can stop it, Gaius retorts that they can't: because a wraith is not alive, it cannot be harmed by any mortal weapon, and will continue killing until it achieves its ultimate goal: revenge.
The next day's challenge is the same as the first: Sir Pellinore fights the Knight, and again manages to wound the Knight (noticed this time by both Morgana and Guinevere). The Knight once again shows no sign of harm and finishes off Sir Pellinore. This time, Arthur throws down his gauntlet and issues his own challenge, to the shock of Uther. The Black Knight accepts and stalks away. Uther tells Arthur to revoke the challenge. Arthur refuses as it is against the rules, and to prove that he is worthy of the throne. Uther says that Arthur will surely die. Arthur comments that Uther has little faith in him.
Merlin suggests that he and Gaius will have to find a way to destroy the wraith. Merlin goes to try an idea to use magic in an attempt to destroy the Knight, whilst Gaius goes to the King and tells him that Tristan's tomb is empty and Tristan himself has been conjured from the dead. Gaius tells Uther not to let Arthur fight. Gaius tells Uther that no mortal weapon can kill the wraith and that Arthur will die. Uther says that Arthur will not listen to him, prompting Gaius to suggest that Uther tells Arthur who the knight is. Uther reveals that Gaius has already sworn not to tell a soul and dismisses him. Meanwhile, Merlin attacks the Knight with magic, conjuring a ring of fire that surrounds the knight. However, the magic has no effect, causing Merlin to try reasoning with Arthur, telling him to back out: Arthur still refuses.
In the dead of night, Uther is confronted by Nimueh, who states the wraith is her revenge for Uther banishing her from court and murdering so many of her fellow magic-users. Uther accuses her of killing Igrayne, but she insists she had no choice: by using magic to conceive Arthur, Igrayne had to die to preserve the balance of the world, and that had she known the depths of Uther's revenge, she would never have helped him. Nimueh leaves, stating that having seen so many people she loved die at his hands, now Uther will know the same pain.
Merlin, with the help of Geoffrey, looks for information on weapons that can slay the undead. After finding a cryptic reference to weapons blessed by a dragon, Merlin gets a sword from Guinevere, then goes to the Great Dragon. The Dragon initially refuses, saying it will be better to let the wraith take its revenge on Uther, but Merlin refuses, saying if Arthur dies in the challenge, he will have no destiny. The Dragon grudgingly agrees to bless the sword, but insists it is only to be used by Arthur: in the wrong hands, it could be used for terrible evil.
Gaius, at Uther's request, drugs Arthur, while Uther takes his place in the challenge. He meets Merlin in Camelot's armoury and, despite Merlin's protests, takes the sword for himself, using it to fight the wraith. Uther challenges the wraith, saying it can have what it came for: the father, not the son. A long and close-fought battle ensues: Uther and Tristan are well-matched, but the fight reaches a turning point when Uther knocks off Tristan's helm. Tristan, revealed for what he is- a decaying, decrepit corpse- roars in fury and attacks relentlessly, putting Uther on the defensive. However, Tristan's sword becomes trapped in Uther's shield and while the wrait tries to free his sword, Uther runs him through. Finally beaten, Tristan gives a scream of defeated rage before bursting into flame. A furious Nimueh, watching the fight in the crowd, slinks away defeated.
Arthur confronts Uther after the fight, but Uther defends himself saying he couldn't allow the most precious thing to him to die. Arthur is surprised by this, having believed he was a disappointment to his father.
The Great Dragon, however, confronts Merlin and is furious to learn Uther wielded the sword instead of Arthur, saying that in Uther's hands, the sword will only bring evil. As he cannot destroy the sword, the Dragon orders Merlin to hide the sword where no one can find it or use its power. Merlin sneaks the Sword out of Camelot and casts it into a lake, where it lands on the lake floor (a shot which is shown in the opening credits).