
The scenario presented is based on the general release version of 1925, which has additional scenes and sequences in different order than the existing reissue print (see below).
The film opens with the debut of the new season at the Paris Opera House, with a production of Gounod's Faust. Comte Philip de Chagny (John St. Polis) and his brother, the Vicomte Raoul de Chagny (Norman Kerry) are in attendance. Raoul attends only in the hope of hearing his sweetheart Christine Daae (Mary Philbin) sing. Christine, under the tuition of an unknown and mysterious coach, has made a sudden rise from the chorus to understudy of the prima donna. Raoul wishes for Christine to resign and marry him, but she refuses to let their relationship get in the way of her career.
At the height of the most prosperous season in the Opera's history, the management suddenly resign. As they leave, they tell the new managers of the Opera Ghost, a phantom who asks for opera box #5, among other things. The new managers laugh it off as a joke, but the old management leaves troubled.
The managers go to Box 5 to see exactly who has taken it. The keeper of the box does not know who it is, as she has never seen his face. The two managers enter the box and are startled to see a shadowy figure seated. They run out of the box and compose themselves, but when they enter the box again, the person is gone. After the performance, the ballet girls are disturbed by the sight of a mysterious man (Arthur Edmund Carewe), who dwells in the cellars. Arguing whether or not he is the Phantom, they decide to ask Joseph Buquet, a stagehand who has actually seen the ghost's face. Buquet describes a ghastly sight of a living skeleton to the girls, who are then startled by a shadow cast on the wall. The antics of stagehand Florine Papillon (Snitz Edwards) do not amuse Joseph's brother, Simon (Gibson Gowland), who chases him off.
Meanwhile, Mme. Carlotta (Virginia Pearson), the prima donna of the Paris Grand Opera, barges into the managers office enraged. She has received a letter from "The Phantom," demanding that Christine sing the role of Marguerite the following night, threatening dire consequences if his demands are not met.
In her next performance, Christine reaches her triumph during the finale and receives a standing ovation from the audience. When Raoul visits her in her dressing room, she pretends not to recognize him, because unbeknownst to the rest there, the Spirit is also there. Raoul spends the evening outside her door, and after the others have left, just as he is about to enter, he hears a man's voice within the room. He overhears the voice make his intentions to Christine: "Soon, Christine, this spirit will take form and will demand your love!" When Christine leaves her room alone, Raoul breaks in to find it empty.
Carlotta receives another discordant note from the Phantom. Once again, it demands that she take ill and let Christine have her part. The managers also get a note, reiterating that if Christine does not sing, they will present "Faust" in a house with a curse on it.The following evening, despite the Phantom's warnings, a defiant Carlotta appears as Marguerite. At first, the performance goes well, but soon the Phantom's curse takes its effect, causing the great, crystal chandelier to fall down onto the audience. Christine runs to her dressing room and is entranced by a mysterious voice through a secret door behind the mirror , descending, in a dream-like sequence, semi-conscious on horseback by a winding staircase into the lower depths of the Opera. She is then taken by gondola over a subterranean lake by the masked Phantom into his lair. When the Phantom admits to who he is and his love for her, Christine faints and is carried into a suite fabricated for her comfort.

Philippe is drowned by Erik when he goes looking for Raoul in the cellars of the Opera. The Phantom gives Christine a choice of two levers: one shaped like a scorpion and the other like a grasshopper. One will save her lover Raoul and the other will blow up the Opera! Christine picks the Scorpion but it is a trick by the Phantom: it will "save" Raoul and Ledoux from being blown up-by drowning them! Christine begs the Phantom to save Raoul by promising him anything. At the last second the Phantom opens a trapdoor in his floor through which Raoul and Ledoux are saved. The Phantom attempts to flee with Christine in a stolen carriage. However, in the final sequence, while Raoul saves Christine, Erik/Phantom is pursued and killed by a mob on the streets of Paris who after beating him, throw him into the Seine River to finally drown.
In the original 1925 version there was a short scene showing Christine and Raoul on a honeymoon.
(An alternate ending features Christine giving the Phantom her ring, then departing with Raoul. The Phantom shrieks in pain and falls over dead, of a broken heart.)
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