The story is about a young shepherd called Santiago, whose greatest aim in life is to marry the local merchant’s daughter. He spends his days in the bliss of a stagnant life that has no adventures. One day, while sleeping inside an old church, he dreams of a treasure that can be found under the pyramids of Egypt. A consultation with a gypsy confirms that the dream is worth following as it was spoken in the language of the world. Not convinced, Santiago goes on with his life. Everything changes when an old man called Melchizedek, who was the King of Salem, offers directions to the treasure in exchange for one-tenth of Santiago’s sheep. He also gives him two black stones to take on the journey as money. Santiago takes the risk, and sets off to Tangiers to find the treasure.
Along the way, he meets many interesting people, including an Englishman who is looking for the great alchemist who has discovered the Philosopher’s Stone and can transform metal into gold. Santiago joins him, and finally meets the alchemist, who then becomes his guide on the journey. The alchemist helps Santiago find his inner self; and the ability to commune with nature, to control the wind, save a desert tribe, and see into the future. Santiago also meets Fatima, the love of his life and his soul mate, whom he promises to marry after he has found the treasure.
A changed man, Santiago leaves the desert and finally reaches the pyramids, where he is sure he will find the treasure. The tale reaches a sort of anti climax here, when two wayside thieves force Santiago to reveal the reason for his being there. Unwillingly, Santiago tells the men about his dream of finding treasure in the Egyptian pyramids. The men surprise him by saying that they dreamt of finding treasure in the church where Santiago had originally had his dream.
Santiago returns to his homeland to find the treasure under the very place where he had lain so long ago. He takes the treasure and leaves behind the two stones that Melchizedek gave him. His last journey is the journey back into the desert to look for Fatima and marry her as he had promised.
The entire story is a metaphor for the journey of life. A dull, unmotivated life may be comfortable but it is also a life that is easily forgotten and fades away in to Time, having achieved nothing of importance. The life with a purpose may be hard to live, but it will be a life well lived and the end will be a true loss to the world. Santiago represents the modern man who steers clear of almost all adventure, giving himself reachable goals that only cover his selfish needs. The modern man does not look beyond the most basic human needs like money, a job, a house, a person who will love them, and the comfort of a bed and sleep every night. His quest for the treasure transforms him into a hero, a warrior, a seer, an adventurer, a lover, and man whose soul is one with God and nature. He forgets his initial frivolous desires and gives importance to the more important things in life.
The fact that the treasure was hidden right under where he slept, while he had to travel half way around the world for it, may seem unfair. On the other hand, who knows! If Santiago had found treasure under the ground where he lay, he probably would never have moved from the spot, spending his entire lazy life in one place, never going forward. He would be no better as a person. The journey is what makes the difference, and the treasure is more valuable for all the troubles he had to go through to find it.
The story also drives home the point that the most important things in life lie closer to us than we think. It does not lie in a bog house on a faraway island, or in plush jobs in high-rise buildings, or in making more money or friends than is humanly possible. It lies in being one with your Maker, in keeping promises and loving your family, in burning and molding your inner self to be a better person, and in respecting nature.