Magician Alfred Borden (Christian Bale) is on trial for murder, accused of killing his lifelong rival, Robert Angier (Hugh Jackman). They first began working together as ringers for Milton the Magician (Ricky Jay), with John Cutter (Michael Caine) as Milton's engineer of illusions. Angier's wife Julia (Piper Perabo) drowns while performing a predicament escape from a Chinese water torture cell; Angier suspects Borden purposely bound her wrists with a difficult knot, making him responsible for her death. At the funeral, Borden enrages Angier by saying he does not know which knot he tied. The two men begin competing magic careers: Borden becomes "The Professor" and hires Bernard Fallon as his engineer; Angier performs as "The Great Danton" with Cutter and his assistant, Olivia Wenscombe (Scarlett Johansson). During a parlor magic job, Borden meets Sarah (Rebecca Hall); they marry and have a daughter, Jess. Both magicians begin to disrupt each other's acts: Angier interferes with Borden's performance of the bullet catch, severing two of Borden's fingers, and a disguised Borden sabotages Angier's performance of the vanishing bird cage illusion, damaging Angier's reputation. Borden soon astonishes crowds with his new illusion, "The Transported Man". Angier hires a double and steals Borden's act, calling it "The New Transported Man". Obsessed with knowing the secret, Angier sends Olivia to spy on Borden. Olivia provides Angier with Borden's enciphered diary, but she falls in love with Borden and double-crosses Angier, allowing Borden to sabotage Angier's act, which cripples Angier's left leg. In return, Angier and Cutter capture Fallon and bury him alive inside a coffin. To ensure Fallon's release, Angier demands the key to Borden's illusion. Borden gives him the word "TESLA", and suggests that it is the transposition cipher of Borden's notebook and the key to the illusion. Angier travels to Colorado Springs to meet Nikola Tesla (David Bowie) to try to learn the secret of Borden's illusion, paying Tesla to construct a teleportation machine. Angier learns from Borden's notebook that he has been sent on a wild goose chase. Feeling cheated, he returns to Tesla's lab to demand his money back, but discovers Tesla's machine creates an exact duplicate of an object and leaves the original intact. Tesla leaves Colorado Springs after his rival, Thomas Edison, sends henchmen to torch Tesla's lab; he leaves Angier an improved version of the machine, but warns him to destroy it. Borden's relationship with Olivia takes a heavy emotional toll on Sarah, and she eventually hangs herself. Angier returns to London to produce his new act, "The Real Transported Man". Borden attends Angier's performance again and slips backstage just in time to see Angier fall from a trap door into a locked water tank. Borden tries to save him, but Angier drowns before his eyes. Cutter catches Borden, and he is convicted of murder and sentenced to death. In prison, Borden reads Angier's diary from Colorado, which addresses him directly with hopes he will rot in prison for his murder. He then finds out that his daughter will become a ward of court, unless he accepts a mysterious offer. A man named Lord Caldlow sends his solicitor to meet Borden in prison. Caldlow asks for all of Borden's secrets and devices, including the truth of "The Transported Man". In exchange, he will adopt Jess, and raise her in a rich and comfortable lifestyle. Borden agrees, but refuses to reveal all unless he can see his daughter. When Lord Caldlow visits Borden with Jess in tow, Borden realizes that he is Angier. Beaten, Borden gives him a note containing his secrets, but Angier tears it up without reading it. When Cutter arrives to oversee the transfer of Tesla's machine to Lord Caldlow, he sees Angier's deception, realizes that Borden was innocent, but Borden is nevertheless hanged for his alleged crime. Cutter accompanies Angier to the abandoned building and helps him store Tesla's machine. Cutter leaves, silently acknowledging the arrival of a very-much-alive Borden, who fatally shoots Angier. Borden reveals that he was actually two identical twins who lived as Fallon and Alfred, alternating between each role. One twin (the one still alive) was the husband of Sarah and father to daughter Jess, and loved Sarah more than the magic; the other was in love with Olivia. They played one individual in life and in the illusions. Angier's method is also revealed: During the illusion, the machine created a duplicate of Angier, with one falling through a trap door into a locked tank and drowning, and the other being teleported to the balcony. Each tank contains a drowned Angier. Borden leaves Angier to die as a fire consumes the building. Afterwards, Cutter reunites Borden with his daughter.