The story begins at the time of the first meeting of Erik (the Phantom) and a street singer named Christine. Erik was born and raised in the catacombs under the Paris Opera House and needs beautiful music – he cannot exist without it. Complications arise when Gérard Carrière, the company manager, loses his position as head of the Opera house and therefore cannot protect Erik any longer. Furthermore, Carlotta, the new diva and wife of the new owner of the Opera, has such a terrible voice that the Phantom is in torment. His salvation must eventually come through Christine, whose voice is so beautiful that he falls in love with her. He accepts Christine as his pupil, training her for the opera, but forbids her to see his face. Erik's rival for Christine's affection is Count Philippe de Chandon, whose influence helps Christine get a minor job with the Paris Opera, but it is Erik's training that helps her earn a place as a member of the company. When Carlotta's jealous machinations ruin Christine's debut, Erik spirits Christine to his underground lair and later takes a terrible revenge by electrocuting Carlotta.
Carrière finds Christine and reveals an amazing secret: he is actually Erik's father. Emboldened by this revelation, Christine begs Erik to let her see his face, since his mother was able to look at him and smile. Reluctantly, he removes his mask (although the audience never sees his face), but Christine doesn't have the same fortitude and recoils in horror, causing Erik to go on a destructive rampage. Carrière helps the guilt-stricken Christine to escape, and later he returns to tell Erik the truth about their relationship. However, Erik has known all along that Carrière is his father and has only waited for Carrière to corroborate the fact. Erik fears that he will be captured and treated like a circus freak because of his horrendous face, but Carrière promises Erik that he will never be put on display. The police surround him, and Erik makes a failed attempt to swing to safety on a rope. With Erik dangling helplessly, the chief of police tells his men not to shoot because they "can take him alive!" Erik shouts out to his father for help. Carrière understands; he grabs a policeman's gun and aims at his son. Reluctantly, he fires, and the Phantom falls. Fatally wounded, Erik allows Christine to remove his mask. She now smiles and tells him "You are music, beautiful music, and you are light to me ... you are life to me," and replaces the mask as he dies.