The historical facts in the play are taken primarily from Raphael Holinshed's Chronicles, but Sir John Falstaff and his Eastcheap cronies are original creations who add an element of low comedy to Henry IV that is missing in Shakespeare's earlier chronicles.

The "tavern" dimension of Henry IV: Part I is purely Shakespeare's creation. Its addition allows Shakespeare to use the dramatic techniques of juxtaposition, inversion, and antithesis as the plot shifts back and forth between the troubled realm of Henry IV's court and the madcap, vulgar world of the tavern in which Sir John Falstaff presides. Indeed, the counterpoint contrast between the high and the low that Shakespeare uses here was a radical stage innovation in its day, allowing for the inclusion of comic episodes within a deadly serious political history. At bottom, Henry IV: Part I is essentially a coming of age story in which the king's son, Prince Henry or Hal, emerges from his youthful role as a wastrel companion of the tavern crew, into the role of a genuine English monarch by virtue of both blood and character.

Set in a kingdom plagued with rebellion, treachery, and shifting alliances in the period following the deposition of King Richard II, the two parts of Henry IV focus more on the development of Prince Hal (later Henry V) from wastrel to ruler than on the title character. Indeed, the king is often overshadowed not only by his son but also by Hotspur, the young rebel military leader, and by Hal's roguish companion Sir John Falstaff. Secondary characters (many of them comic) are numerous, and the plot shifts abruptly between scenes of low comedy and the war against the alliance of the Welsh and the rebellious Percy family of Northumberland. King Henry IV has two main problems as the opens. First, the Welsh leader Owen Glendower has beaten one of the King's armies and captured its leader, Edmund Mortimer. Second, his son, Hal, is a miscreant keeping company with rogues such as Falstaff.

King Henry IV, the aging king of England, is very disappointed in his son: everybody in the land knows that Prince Hal, the heir to the throne, spends most of his time in taverns on the seedy side of London, hanging around with highwaymen and vagrants. His closest friend among the rascally crew is Falstaff, a sort of substitute father figure; a worldly, fat old man who steals and lies for a living, Falstaff is also an extraordinarily witty person, who lives with great gusto.

Trouble is brewing in England. A discontented family of noblemen, the Percys, starts to plan a rebellion against the King. This family, which helped King Henry rise to power, is angry because they feel the King has forgotten his debts to them. The Percy forces, lead by young Harry Percy, called Hotspur. Hotspur is a youth of Prince Hal's own age but is as widely respected for his bravery in battle as Hal is scorned and despised for his idle tavern life.

The Percy family is less than happy when Henry refuses to ransom Mortimer from Glendower, and the heads of the family-Worcester, Northumberland, and Henry Percy - decide that they will in turn not yield prisoners from a Scottish campaign to King Henry. They gather a formidable set of allies around them: leaders of large rebel armies from Scotland and Wales, as well as powerful English nobles and clergymen (York, Douglas, Mortimer, and Glendower) who have grievances against King Henry. In the midst of this, young Hal, the Prince of Wales, is content in running with Falstaff and his lot, drinking, playing pranks, and thieving.

The King has no choice but to go to war. The rebels led by the Percys immediately run into difficulties. Hotspur proves quarrelsome, arguing with Glendower over the division of England once King Henry is defeated-and this before the battle has even begun. Northumberland takes ill, and Glendower's force is seriously delayed. Added to these troubles, King Henry has finally struck a chord within his son, Hal; after a lengthy rebuke, Hal determines to make amends with his father with a valiant display against the rebels. King Henry has also raised a considerable army to stop Hotspur and the rest. He vows that he will abandon his wild ways and vanquish Hotspur in battle in order to reclaim his good name. Drafting his tavern friends to fight in the King's army, Hal accompanies his father to the battlefront.

In a parley preceding the battle, Hal offers to settle matters in a one-on-one contest with Hotspur, winner take all; Henry will even offer pardons to everyone else on the rebel side if Hal and Hotspur meet. Worcester, Hotspur's representative, does not trust this offer, and instead lies to Hotspur that King Henry is spoiling for a fight. In the ensuing battle, the rebels are resoundingly defeated. Hal also challenges and defeats Hotspur in single combat, saving his father in the process, finally winning back his father's approval and affection. The King's forces win, and most of the leaders of the Percy family are put to death. Even Falstaff manages to survive the battle by avoiding any actual fighting - by playing dead-attempts to steal the glory for Hotspur's death. Hal, unwilling at this point to press the issue, lets Falstaff have his moment.

Powerful rebel forces remain in Britain, however, so King Henry must send out his sons and his forces to the far reaches of his kingdom to deal with them. When the play ends, the ultimate outcome of the war has not yet been resolved; one battle has been won, but another remains to be fought.