Sir Launfal was the son of a king from a distant land, a knight at the court of King Arthur, the legendary king of Britain who gathered the Knights of the Round Table. For ten years Launfal served as Arthur's steward, and gave away gold and garments to every squire who asked. No knight was more open-handed, but his liberality had a cost. When Arthur married Guinevere, a princess of ill repute, she singled Launfal out for scorn. At the wedding feast she gave gifts to every knight except him, driving him from court. He rode to Caerleon-on-Usk in Wales, lodging with a former servant. There his money ran out within a year.

One summer day, while Launfal rode alone in the forest near Caerleon, he came to a stream and dismounted to cool himself. Two beautiful maidens appeared from the woods, sent by their mistress to bring him to her pavilion. Launfal followed them to a clearing where a tent of silk hung with cloth of gold stood. There he met Tryamour, the daughter of the King of Faerie, a realm beyond the mortal world. She offered him a bargain. She would become his lover and visit him invisibly. She gave him a magical purse that never emptied, a white fairy horse named Blaunchard, an invisible dwarf servant named Gyfre, and armour that no weapon could pierce. The single condition was absolute secrecy. He must never tell any mortal of her, or every gift would vanish in that instant.

For seven years Launfal lived in splendour. He held tournaments at Carlisle on the border of Arthur's realm, and his fame eclipsed all other knights. He defeated a giant named Sir Valentyne in single combat. But the fairy bargain demanded silence, a fragile shield in a court of gossips. One day Arthur held a feast, and Guinevere slandered him. She mocked his cowardice and poverty. Launfal, burning with wounded pride, forgot his promise and declared that Tryamour was more beautiful than Guinevere, and that even the least of her maidens was fairer than the queen. The magic shattered. He returned to find the purse empty, the horse gone, and Gyfre silent. He was ruined, guilty of treason against the queen's honour.

Guinevere demanded his death, and ordered a trial. He was given a year and a day to produce his lady before the court, or be hanged. The months passed and his hope faded, for the fairy world had closed against him. On the final day he stood before the assembled court. Then a trumpet sounded from the sky. Tryamour rode into the hall on a fairy palfrey of supernatural grace, attended by ten maidens of blinding radiance. She declared his words true. Then she turned to Guinevere and blew upon her face, a breath that struck the queen blind. Arthur and every knight saw that justice had been done.

Tryamour led Launfal from the hall to Blaunchard and Gyfre. They rode to the fairy isle of Olyroun, a land of eternal summer. There Launfal dwells still, but has not entirely left the mortal world. Once each year, his horse neighs and his armour flashes, and any knight seeking a worthy opponent may find his match with Sir Launfal, who learned that a fairy's love cannot survive a boastful tongue.