The screenplay, loosely inspired by British playwright John Osborne's play A Patriot for Me, charts the rise of inter-ethnic tensions in Austro-Hungary, which were to bring about the assassination in Sarajevo and the empire's eventual disintegration.

Alfred Redl, a Ruthenian boy from Galicia in the Austro-Hungarian Empire, wins an appointment to a prestigious military academy in spite of being the son of a mere peasant farmer.

At the military academy, the young Redl is punished along with a fellow cadet, Kristof Kubinyi, when the latter's wooden lance breaks as they are practicing fighting; as they are beaten while running the gauntlet, they put their arms around each other's bare shoulders.

To Kubinyi's aristocratic parents, Redl hides his true humble background, pretending to be of Hungarian ancestry and a member from an old family who lost all its fortune.

As a Hungarian, Kubinyi slowly falls prey to the national aspirations of a Hungary free from Habsburg rule, while Redl remains fiercely patriotic and faithful to his benefactor, the Austrian Emperor.

When the two young men visit a brothel, Redl seems more interested in watching his friend having sex than in engaging a woman in his own room.

Colonel von Roden intervenes on Redl's behalf again, bringing him back to Vienna to serve as deputy chief of the counter-espionage branch of the Evidenzbureau.

On Katalin's suggestion, Redl undertakes a loveless marriage of convenience in order to quell rumors of his homosexual proclivities.

Redl's single-minded devotion to duty draws him into the orbit of the Crown Prince, who is a ruthless schemer whose ultimate objective is portrayed as to overthrow the Emperor in a coup d'état.

[2]) Redl participates in one of the Crown Prince's plots, which involves setting up an aging Ukrainian officer for a dramatic fall so as to shake the army out of its complacency.

Redl contributes to his own downfall by allowing himself to be seduced by an Italian officer and giving him military secrets to be passed to the Russians.