He is headed to the town where a year ago he met the merchant and his beautiful daughter, and can think of little else. The fact that he could read had surprised the girl; it was a skill he learned in school before deciding to become a shepherd, though he did not share the details of this decision with the girl. In four days he will again bask in her presence and hopes she has not forgotten him. Now he feels ready to tell her about the time he spent in the seminary where he learned many things, and how he summoned the courage to ask his parents’ permission to leave it behind and instead embark on a life of travel.
Happily recalling a conversation with his father two years before, Santiago is pleased to have more to think about than food and water, unlike his sheep. He is pleased to remember that there is an old woman who interprets dreams in Tarifa.
The old woman’s incantation sounds like a Gypsy prayer to the boy’s ears, but he is comforted by the presence of a Sacred Heart of Jesus and he says an Our Father silently. He came for an interpretation of his dream, but the old woman looks at his palms, which irritates him slightly. He tells her of the dream he has had twice, in which a child who plays with his sheep transports him to the Egyptian pyramids where the child promises Santiago will find hidden treasure. The old woman offers not to charge him for the visit if he will promise to give her one-tenth of the treasure if he finds it. Santiago is glad to oblige, and she tells him he must go to the pyramids. Disappointed, as he has no means to get to Egypt, the boy leaves, telling himself he will never again put weight in dreams, but get on with his errands. He sits down on a bench to read the book he always carries and is joined by an old man who is interested in talking to him.
Although Santiago replies dryly to the man’s questions initially, he begrudgingly grants his request for a sip of wine and is surprised to learn the man has read his book. Telling him about the world’s greatest lie, the old man piques the boy’s curiosity and impresses him by understanding that Santiago is a shepherd because of his love of travel. The man introduces himself as Melchizedek, mentioning he was born in Salem, and asks Santiago how many sheep he has, offering to help him find the treasure if he gives him one-tenth of his flock of sheep. Suspicious that he is working with the old woman, Santiago hesitates, but when Melchizedek leans over to write in the sand with a stick, he notices a flash of something metal under the old man’s clothes and is again intrigued. Although the bright metal distorts his vision momentarily, when it returns to normal he is surprised to see his life story written in the sand in front of him. Telling Santiago he is the King of Salem, Melchizedek explains that he is talking to the boy because he has discovered his Personal Legend. He assures Santiago that most people are victims of a mysterious force that deters them from pursuing the Personal Legend clear in their youth, but that “the Soul of the World is nourished by people’s happiness” (22) and that if he wants something, all forces in the universe will conspire to help him achieve it. He tells Santiago that he had wanted to travel once, too. He also tells him he has taken different forms to appear to different people at key moments, including a miner who needed a sign just the week before. Santiago agrees to give him one-tenth of his flock the next day in return for helping him find the hidden treasure, and anxiously awaits their meeting. He doubts he should really risk everything to travel to Africa.
As he anticipates abandoning the life he knows, Santiago decides to remain a shepherd after all, and as he gazes across the strait the wind picks up and his thoughts turn to how familiar it is to him. The next day at noon, he meets the old man at the agreed upon time and place, and is pleasantly surprised to recount that his friend bought all but the six remaining sheep, saying he had always dreamed of becoming a shepherd. The old man smiles, telling Santiago this is an illustration of the principle of favorability. As he continues describing good omens, a butterfly flits past, reminding Santiago of his grandfather, and the old man seems to read his thoughts. Opening his coat to reveal a brilliant breastplate encrusted with precious stones, Melchizedek hands the boy two stones to guide him, introducing them as Urim and Thummim. He tells him to try to always make his own decisions, and tells him a story of a boy sent to visit the wisest man in the world to discover the secret of happiness.
The wisest man in the world instructs the boy to carry a teaspoon filled with oil through his magnificent palace, and when the boy returns hours later he has seen nothing of the wonders around him, focused as he was on not spilling the oil. He is sent out again to enjoy the marvels surrounding them, but returns having dripped the oil along the way. The old man cautions him that the secret to happiness lies in the balance between observing the beauty around him and never spilling the drops of oil. Santiago understands the story and applies it to his own wish to travel, remembering not to neglect his sheep, or responsibilities.
The two part ways. Melchizedek ascends to the highest point in Tarifa where he wistfully recalls a prior encounter with the Biblical patriarch Abraham, and Santiago heads to Tangier.
Sitting in a bar in the port on the other side of the strait, Santiago is quickly befriended by a boy about his own age who offers to guide him to the Pyramids. Since the boy speaks Spanish and knows about local customs, Santiago is eager to trust him. He is momentarily distracted by a marvelous sword hanging in the marketplace, and when he turns back to his supposed new friend, he realizes the stranger has run off with all his money. Belatedly understanding that the owner of the bar was trying to warn him in Arabic, Santiago feels foolish and upset, but finds comfort in the stones still safely in his pouch. Rather than feel sorry for himself as a victim, he decides to regard himself as an adventurer, and sets off with rekindled energy in search of his treasure.
Observing the market in the morning, Santiago realizes there is a language understood by both Spanish and Arabic speakers. After being given the first sweet of the day made by the candy maker he is optimistic that he can learn to understand the language of this new world. He soon finds the crystal merchant’s shop, and cleans the glass in the window in exchange for lunch. Santiago tells the merchant of his hope to save enough money to travel to the pyramids, and the merchant laughs and offers to give him money to get home. The boy declines the gift, but gratefully accepts the offer of employment, thinking it will help him buy more sheep.
Santiago is introduced as a simple shepherd, a boy who could represent any child full of the potential of youth. Although he has few possessions, he is happy with his lot in life and seems content to tend his sheep until his dream of treasure is repeated the night he sleeps in the church. The mysterious element of the dream is augmented by the gypsy woman’s interpretation of it, for although she has never heard of the pyramids of Egypt she is sure he must follow the signs since it was a child who appeared to him in his dream. Santiago is torn between the appealing nature of such a quest and his responsibilities to the flock of sheep dependent on his care.
It is the appearance of Melchizedek that seals his fate. Stating that he comes from Salem, a reference to the ancient city of Jerusalem, the old king impresses the boy despite his initial suspicion of the stranger. Santiago has been revealed to be a Christian, as is evident when he chants an Our Father prayer before having his fortune told. Melchizedek is a name from the Old Testament, and the old man mentions he has approached individuals before at such a key point in their lives, among them Abraham, forefather of the Jewish people. When he looks up to heaven after sending Santiago on his journey to Africa, Melchizedek seems to apologize to God himself for the vanity of wishing the boy would remember his name. The Biblical references deepen the meaningful interaction between the two, and place Santiago and his quest on the same plane as his ancestors’ various quests, however few of them managed to realize them or even remember them through adulthood.
As Melchizedek comments, although all people are born with a Personal Legend, remarkably few stay true to the dreams of their youth, becoming confused by the dominant messages of their societies, which tell them, for example, that it is better to become a stable baker than a wandering shepherd. Santiago’s difference from his peers, then, in leaving the seminary to tend a flock of sheep as the sole means of travel available to him, already differentiates him from the many young men who would sooner abandon the romantic notions of their dreams than the comforts of the life they have come to know. But Santiago welcomes the opportunity to see Africa, and even after being robbed in the market upon arrival, is willing to view himself not as a victim of circumstances, but as the hero of his own glorious quest for hidden treasure and the mystery of his own destiny. Part One concludes with his repetition to himself that he is on a great adventure.