action of the play is set in the city of Thebes, which is in the grip of a deadly plague at the start of the play. The reason for the plague is that Laius' murderer has not been punished. Laius was the ruler of Thebes before the present King (Oedipus) and was supposedly killed during a journey by a group of robbers. The gods at Delphi threaten that unless the murderer is caught and tried, Thebes will continue to suffer. This is the background against which the entire drama unfolds. The present king of Thebes, Oedipus, firmly resolves to find the murderer and prosecute him. He prohibits his people from withholding any information about the man in question. He himself curses the murderer.

The old prophet Tiresias is also summoned by Oedipus to be consulted over the matter, but his meeting with Tiresias takes an ugly turn. Tiresias refuses to reveal anything to Oedipus because he is aware of the dreadful fact that it is the ignorant Oedipus himself who has murdered Laius and that Laius was Oedipus' father and that he is married to his own mother. He prefers to keep silent as he does not want to be the cause of Oedipus' ruin.

Oedipus, on the other hand, interprets Tiresias' silence as treachery. He labels him a villain and a conspirator along with Creon. Later, the angry Tiresias leaves, warning that Oedipus will cause his own ruin.

A confrontation between Oedipus and Creon erupts. Creon is distraught by Oedipus' impulsive behavior. As the investigations into Laius' murder proceed, the fact that a sole witness is alive comes to light. Oedipus sends for this man, who is an old shepherd.

Meanwhile, the plot takes a new turn when a messenger from Corinth brings the news that the Corinthian king Polybus is dead. He asks Oedipus to take up the kingship of Corinth. But, Oedipus expresses his reluctance, as he fears his fate according to which he will marry his own mother. The Corinthian shepherd tries to pacify him by revealing the fact that Oedipus was the adopted son of the Corinthian king and queen. He also states that Oedipus' birthplace is in fact Thebes. This twist is significant because Oedipus now wants to find the truth out about his parentage.

Coincidentally, the sole witness of Laius' murder is also the man who had handed over the infant Oedipus to the Corinthian shepherd. This man holds the key to the mystery of Oedipus' birth. Oedipus persuades him to speak up. Finally this Theban shepherd reveals the horrifying fact that Oedipus was the son of Laius and Jocasta. This crucial moment, when Oedipus realizes the truth about his parentage, is an important feature in any well-made tragedy. This is the anagnorisis or the recognition point. At this stage, the protagonist realizes the truth of a situation, discovers another character's identity or learns an unknown fact about his own self. What follows anagnorisis is peripetia or the reversal, where the opposite of what was planned or expected by the protagonist, occurs. In Oedipus Rex all the noble intentions of the protagonist to investigate Laius' murder lead to his own catastrophic end.

A shattered Jocasta commits suicide by hanging herself and Oedipus, unable to see his wretched existence, blinds himself. Oedipus' curse falls on himself, and he wishes to leave Thebes. In a pathetic condition, he pleads with Creon to banish him from the kingdom.

The play ends with Creon's wise words to Oedipus. He says,

Seek not to have your way in all things, Where you had your way before, Your mastery broke before the end.