The central twist of The Circus is that the Tramp is a comedy star without ever knowing it. The Ringmaster deceitfully hires him as a property man, orchestrating situations where his natural clumsiness will erupt during the show, all while keeping the Tramp ignorant of his fame. Merna eventually reveals the truth to him, empowering the Tramp to demand fair pay and better treatment for her.
The film's emotional turning point comes when the Tramp, having fallen deeply in love with Merna, overhears a fortune teller predict she will marry a 'dark, handsome man' who is near. He joyfully assumes it is him, but his hopes are shattered when Merna falls for Rex, the newly hired tightrope walker. The heartbroken Tramp's comedic ability vanishes, and he is fired after several poor performances.
In the climax, Rex fails to appear for his performance, and the Ringmaster forces the Tramp to go on the high wire in his place. He survives a harrowing, monkey-infested walk, only to be berated by the Ringmaster afterward for not being funny. The Tramp attacks him and is fired for good. Merna runs away to be with the Tramp, but in an act of ultimate self-sacrifice, he finds Rex and brings him back to marry Merna. He even gives Rex the ring he had bought for her. The final scene shows the newly married couple rejoining the circus. As the wagons pull away, the Tramp is left alone in the empty ring. He watches them go, picks up a discarded paper star from Merna's act, looks at it sadly, and then, with a characteristic shrug, turns and walks jauntily away into the distance, alone once more.