Ali Baba and the Forty Thieves

The first story told by Scheherazade is that of Ali Baba and the Forty Thieves. Ali Baba (Rufus Sewell) is a poor peasant from Damascus who finds a magical cave where the loot is stolen by the Forty Thieves, a tribe of murderous bandits that have plagued the kingdom. Using the magic words "Open Sesame!", Ali enters the cave and takes the treasure. When Ali tells his brother Cassim (Andy Serkis) about the cave, Cassim demands his own share and goes to the cave himself where he is discovered and killed by the leader of the Forty Thieves, the infamous Black Coda (Tchéky Karyo).

Ali Baba finds Cassim's body hung-up by the Forty Thieves as a warning to others. With the help of his newly hired servant, Morgiana (Amira Casar), Ali takes down the body and gives Cassim a lavish funeral. This alerts Black Coda and the Forty Thieves to the fact that Cassim was not alone in taking their treasure.

Black Coda discovers that Ali Baba and Morgiana are living in a lubricious estate in Damascus and devises a plan to kill all in the household. The Forty Thieves enter the city hidden in oil barrels which are placed outside Ali's estate where they wait for nightfall. Before they can strike, Morgiana discovers the barrels and rolls them down to the bottom of a hill where the dazed Forty Thieves are arrested (and later hanged) by the city guards, although Black Coda escapes.

To celebrate their victory, Ali Baba hosts a feast. Morgiana performs an exotic dance for Ali Baba during which she stabs one of the guests, killing him. She removes the man's false beard, revealing him to be Black Coda. Awed by her loyalty, Ali Baba marries Morgiana.

The Tale of the Poor Hunchback

To prevent Shahryar realizing she's starting a complete new story, Scheherazade begins her next tale by following on from the last, explaining that Faisal (Stanley Lebor) designed Morgiana's wedding attire and his wife, Safil (Jamila Massey), from Constantinople (or Istanbul given the architecture and being under Muslim rule), were at Ali Baba's wedding.

Back in Constantinople, the couple have dinner with Bac-Bac (Alexei Sayle), the Sultan's hunchbacked-jester, during which Bac-Bac chokes on a fishbone and dies. Worried about their reputation, Faisal and Safil leave the body on the doorstep of a Jewish physician, Ezra Ben Ezra (Leon Lissek).

Before Dr. Ezra can take a look at Bac-Bac, he trips over him in the dark and they both fall down his doorway stairs. After the fall, Ezra finds the dead body and assumes that he accidentally killed him. Recognizing Bac-Bac, they repeat the actions of Faisal and Safil by dropping the body down the chimney of their Chinese neighbor, Hi-Ching (Junix Inocian). Hi-Ching mistakenly believes that he is about to be robbed and attacks Bac-Bac with Kung Fu. Hi-Ching mistakenly believes that he killed Bac-Bac by hitting him so hard and (like the others) he fears for his welfare. So he carries the body to a dark alcove, where Englishman Jerome Gribben (Roger Hammond) is walking home in a drunken stupor. Bac-Bac's body falls onto Jerome, who believes he is being attacked. He repeatedly hits the body against a wall and calls the nearby guards. The guards recognize Bac-Bac and arrest Jerome for murder.

Jerome is put on trial and sentenced to death. Unable to bear the guilt, Hi-Ching, Ezra, and Faisal all confess that they had killed the poor hunchback. In the middle of all their arguments, the Sultan (Tony Osoba) comes and demands to know who killed his jester. The Sultan realizes Bac-Bac's death was an accident in any event and frees Jerome and the others, explaining that Bac-Bac would have been amused by the manner of his death.

Aladdin and the Magic Lamp

This story tells the classic tale of Aladdin (Jason Scott Lee), a Chinese thief living in the caliphate of Samarkand (actually, China). While fleeing authorities for pick-pocketing, he sees a carriage and blocks its path. The carriage windows open to reveal the beautiful Princess Zubaïda (Vanessa-Mae). The two see each other and fall in love.

While escaping, Aladdin meets a mysterious African traveler named Mustappa (Hugh Quarshie), who claims to have been a friend of Aladdin's father and is willing to pay him a high price to do a 'simple' task. Aladdin agrees and meets Mustappa at the entrance of the Cave of Wonders. Mustappa gives Aladdin a ring, and swears "by Hector's feathers", that Aladdin will not see his wedding day if he betrays Mustappa.

Aladdin enters the Cave and walks through a Terracotta Army until he finds the lamp. He races back to the entrance, where Mustappa asks Aladdin to give him the lamp before he helps him out. Aladdin refuses, believing Mustappa will take the lamp and leave him in the cave. Mustappa, enraged, closes the cave's entrance and abandons Aladdin, just as the Terracotta warriors come to life. In desperation, Aladdin rubs Mustappa's ring and summons the neurotic Genie of the Ring (John Leguizamo) who reluctantly frees Aladdin from the cave.

Back home with his mother, Aladdin wonders why Mustappa would want a worthless old oil lamp. Rubbing it frees the Lamp Genie (also John Leguizamo) an incredibly powerful and intimidating spirit who can grant Aladdin's wishes. Aladdin and his mother wish to become royalty and for a fortune which they use to buy their way into the Royal Court. Aladdin asks the Caliph for Princess Zubaïda's hand in marriage, but he is turned down as the Princess is betrothed to Gulnare, the oafish son of the Caliph's vizier.

Aladdin discovers that the Princess is in love with him and using the Lamp Genie, he is able to humiliate Zubaïda's betrothed on their wedding night to prevent the marriage from being consummated, by trapping the vizier's son in a foul-smelling privy, and then marry the Princess himself after her furious father annuls the marriage. In Africa, Mustappa realizes that Aladdin is alive and has married as his pet raven, Hector, loses all his feathers. Mustappa goes to Samarkand dressed as a merchant trading new lamps for old ones, prompting a servant in Aladdin's palace to give the magic lamp to the Mustappa. Once the lamp comes into Mustappa's possession, he wishes to undo all Aladdin's wealth. Using the Genie of the Ring, Aladdin challenges Mustappa to a fight to the death with their magic. Each Genie transforms into one beast after another, until the Ring Genie is trapped in a giant mousetrap. Although Mustappa appears to have won, Aladdin is still a thief and is able to pick-pocket Mustappa, taking the Lamp and thus stealing his victory. Reunited with his mother and Zubaïda, Aladdin grants both the Genies their freedom, though only the Genie of the Ring accepts the offer.

The Sultan and the Beggar

At the beginning of the story, Scheherazade explains that her next story is about Amin the Beggar (who looks exactly like Shahryar) and the mean-spirited Sultan Abraschild (who looks exactly like Shahryar's brother) who rules Cairo.

The story follows Amin, (Dougray Scott) a lonely drunkard beggar who meets the ruthless Sultan Haroun Abraschild (a play on the historical Caliph Harun al-Rashid), played by James Frain. After Amin drunkenly brags he could do a better job as Sultan, Abraschild kidnaps the unconscious Amin and dresses him as the Sultan, then orders his servants to pretend Amin is the Sultan, as he watches the events unfold from secret chambers behind the palace walls as a cruel joke. When Amin wakes, he at first thinks he has lost his mind, but soon begins to enjoy being Sultan. He also takes the job much more seriously as well and makes beneficial adjustments to the taxes and the wages of his army, with the Grand Vizier and Commander of the army Abou Nouz (a play on Abu Nuwas, a courtier of Harun's successor Al-Amin) noting that Amin has gotten more done in a day, than the real Sultan has in years. Overhearing this, an angered Abraschild spikes Amin's drink with sleeping powder and has him back into the streets as a beggar. When Amin awakes, he is traumatized and insists he is the Sultan, prompting the city guards to put him in an insane asylum.

Abraschild decides to repeat the joke and again drugs Amin and returns him to the palace dressed as Sultan. When Amin wakes and becomes hysterical, he hears the snickering of Abraschild from inside one of the secret chambers. Panicking, Amin draws a sword and inadvertently stabs Abraschild, believing he is a demon. Seeing that Abraschild is dead and he has left no heir, the Sultan's advisers decide to prevent civil war by telling everyone that the real Sultan has gone on a pilgrimage to Mecca, and that Amin was chosen as the Sultan's successor, all the while continuing to tell Amin that he is the one and only Sultan Haroun Abraschild. Amin goes on to become a respected Sultan beloved by the court and his people.

At the end of the story, as his brother's army approaches Baghdad, Sultan Shahryar realizes he is in love with Scheherazade and has been cured of his madness, but Scheherazade feels Shahryar needs to hear one more story before he goes into battle.

The Three Princes

The last story told by Scheherazade is about the sons of the long-suffering Sultan of Yemen, Prince Ali (Alexis Conran), Prince Ahmed (James Callis), and Prince Hussain (Hari Dhillon). The three are each gifted fighters and fight each other over the smallest of matters. Both their parents believe that when the Sultan dies, the sons will fight each other for the throne and will destroy the kingdom. After causing chaos in the city by fighting over a Princess, their father challenges each of his sons to bring him what they believe is the most precious object in the world, giving them one year to complete their quest.

Ali heads north to a brazen kingdom, and finds a powerful telescope. Ahmed travels east to a mountain Buddhist monastery which possess a mystic apple (the Apple of Life), which when eaten can heal any wound or illness and earns it when he passes a secret test of character. The last brother, Hussain, travels west to the underground city of Petra. He wanders through the underground market looking for the most precious thing in the world, eventually finding a flying carpet.

The journeys of the brothers take up the given year, and all three meet at the Traveller's Rest. Ali's telescope reveals that their father is on his deathbed. The brothers race back to Yemen on Hussain's carpet to save their father with Ahmed's apple of life.

Scheherazade explains that as a result of their adventures, when the brothers eventually succeed their father, they rule the kingdom together in peace and harmony.