Sir Launfal was the steward of King Arthur's court at Caerleon, a knight of such extravagant generosity that he had given away all his own wealth and fallen into poverty and debt. King Arthur, the legendary king of Britain whose Round Table was the centre of chivalry in the realm, had married Guinevere, a queen whose promiscuity was known to every knight at court. Launfal alone spoke against the match, and Guinevere punished him by withholding the customary wedding gift. Humiliated and stripped of his position, Launfal retreated to his home town, where he borrowed a horse from the mayor's daughter and rode into the forest to escape the mockery of his neighbours. There, in the shade of a tree, he was approached by two maidens who served Tryamour, the daughter of the King of Olyroun and the fairy realm. Tryamour offered Launfal her love and three gifts: an invisible servant named Gyfre, a purse that produced gold coins without end, and a horse called Blaunchard, whose coat was as white as flowers and whose trappings were finer than any mortal smith could forge.

Gyfre's first service was to calculate the sum of Launfal's former debts and pay them in full from the ever-filling purse. Then he rode behind ten well-dressed men on ten pack horses, bearing silver, gold, splendid garments and bright armour through the streets of Caerleon as gifts to the restored knight. When the townsfolk asked where all these riches were going, Gyfre answered that they were sent to Sir Launfal, who had been living in great poverty. From that day, no one doubted that Launfal enjoyed supernatural favour, and every night Tryamour came to his chamber, visible to no one except Gyfre and his lord.

The most famous episode of Gyfre's service was the tournament in Lombardy. A giant knight named Sir Valentyne, fifteen feet tall and exceedingly envious of Launfal's fame, challenged the British knight to single combat in the city of Atalye. Launfal sailed to Lombardy with no retinue but Gyfre and no mount but Blaunchard. In the tournament field, their spears shattered and Valentyne knocked Launfal's helmet from his head. Sir Valentyne laughed and made good sport, but Gyfre showed that he was good at need, for unseen by any man, he leaped onto Blaunchard's back and before the two knights met again, he had set his lord's helmet on, fair and well-fitted. At this Launfal was glad and blithe, and thanked Gyfre heartily for his brave deed. Then Sir Valentyne smote Launfal so that his shield fell from him, but before it touched the ground, Gyfre caught it up again and returned it to his lord. On the third charge, Launfal struck with such force that both Valentyne and his horse fell dead, and the Lombard knights fled the field. Gyfre had saved his master from shame and defeat without ever being seen.

The vanishing of Gyfre was as sudden as his service had been faithful. When Queen Guinevere propositioned Launfal and he refused her, she accused him of insulting her before the court. In his defence, Launfal boasted that his fairy lady's ugliest handmaiden was more beautiful than the queen, thereby breaking his vow of secrecy. In that instant, Tryamour's gifts were revoked. The ever-full purse emptied, the flower-white horse Blaunchard vanished from the stable, and Gyfre melted away like snow before the sun. Launfal was left in rags, alone, and the invisible servant who had caught his shield and set his helmet was gone.

At Launfal's trial, when he was given a year and a fortnight to produce his lady as proof of his boast, the court gathered to watch his humiliation. But Tryamour arrived in a procession of maidens more beautiful than mortal women, and she vindicated Launfal before the assembled knights. As punishment for her false accusation, Tryamour breathed upon Guinevere and struck her blind. Then Gyfre, now visible at last, appeared from out of the forest and stood beside Launfal with Blaunchard. Without further delay, Launfal sprang into the saddle and rode after his beloved. Together with Tryamour and her ladies, they departed for the Isle of Olyroun, the fairy kingdom from which Gyfre had come. Once every year, on a certain day, Launfal is said to return to Britain to joust in tournament, and those who listen on the right night may hear Blaunchard's neighing upon the wind, though whether Gyfre still rides unseen beside his master, none can say.