The Chosen begins in 1944 with a softball game in a Jewish section of Brooklyn, New York, between students from two Jewish parochial schools. Each team represents a different Jewish sect with a different level of religious observance. Danny Saunders represents a Hasidic sect led by his father, Reb (short for rabbi) Saunders. Reuven Malter leads the opposing team, which is composed of Modern Orthodox Jews, who are not as ultra-Orthodox in terms of their religious observances as Hasidic Jews are. Reuven is the son of David Malter, a yeshiva professor.
During the game, Danny hits a ball that strikes Reuven in the face, injuring his eye and sending him to the hospital for surgery. Danny visits Reuven in the hospital and apologizes for hitting him with the ball. At first, Reuven rejects Danny's apology, but at the urging of his father, he becomes Danny's friend. Speaking of himself, Danny tells Reuven that he will inherit his father's position, as is common in the Hasidic tradition, and become a rabbi, but he also admits that he would rather become a psychologist. Reuven learns that Danny has been raised in virtual silence — the only time Reb Saunders talks to his son is when they study Talmud together.
Danny confesses that studying only the Talmud is boring and that he secretly reads secular books in the public library. According to Danny, even though Jews have an obligation to obey God, sometimes he is not sure what God wants. Reuven wants to become a rabbi but also has a strong interest in math. Danny makes the perceptive and rather amusing observation that he has to be a rabbi but doesn't want to be one, and Reuven does not have to be a rabbi but wants to be one.
Reuven visits Danny at his home several times and discusses the Torah and other writings with Reb Saunders and Danny. During one of these visits, Reb Saunders talks to Reuven privately. The Reb says that he knows that Danny has been visiting the public library and wants to know what he has been reading. Reuven tells Reb Saunders everything — how Danny met Mr. Malter in the library and how his father helped Danny select reading material. The Reb says that Danny is so brilliant that he cannot talk to him, but he also says with deep emotion that Danny is his most precious possession.
When Mr. Malter suffers a heart attack, Reb Saunders invites Reuven to stay with him and his family until Mr. Malter's health improves. Danny and Reuven spend much time together discussing various literary and Jewish subjects. When they visit Reuven's father in the hospital, Mr. Malter talks passionately about the 6 million Jews slaughtered by Hitler and the Nazis and how the American Jews must help rebuild this human loss. He also supports establishing a Jewish state in Palestine. Jews cannot wait for the Messiah to come to aid them, he argues. They must help themselves. Mr. Malter's position on Palestine contrasts that of Reb Saunders, who says that Palestine cannot become a Jewish state until the Messiah comes.
Danny and Reuven enter Hirsch College for the fall term. Danny is upset that the college psychology department discredits the work of Sigmund Freud, preferring instead the discipline of experimental psychology.
Mr. Malter gives a speech at Madison Square Garden in New York City, urging an end to British control of Palestine and the creation of a Jewish state in its place. Reuven is moved by the speech, but Reb Saunders is furious. He forbids Danny to associate with Reuven. Reuven tells his father about this, adding that it wasn't unexpected. Reuven says to his father that Reb Saunders is a fanatic. Mr. Malter agrees but adds that the fanaticism of people like Reb Saunders has kept the Jewish people alive for the last 2,000 years.
For the rest of the semester, Danny and Reuven do not speak to one another. Reuven finds the estrangement terrible to endure — his grades suffer, and he constantly wonders what Danny is thinking and how he's getting along.
The conflict between Reb Saunders and Mr. Malter continues. Reb Saunders organizes his followers into a group called the League for a Religious Israel. Mr. Malter continues speaking on behalf of a Jewish state in Palestine.
On November 29, 1947, the United Nations decides to partition Palestine into an Arab state and a Jewish state. Reb Saunders condemns the United Nations' announcement and orders Jews to ignore it. The state of Israel is formally proclaimed on May 14, 1948. After the United Nation's action, Reb Saunders' anti-Zionist stance fades in importance as far as the students at Hirsch College are concerned. Danny is again permitted to speak to Reuven, and their rift is healed.
At his professor's suggestion, Danny decides to pursue a Ph.D. in clinical psychology, which means that he will have to renounce his claim to his father's rabbinical position. Danny and Reuven discuss how Danny should tell his father, and Danny also gets advice from Mr. Malter. Ironically, Reb Saunders already knows of Danny's decision.
Through Danny, Reb Saunders invites Reuven to his home for the Passover holiday, and the two young men talk together with Reb Saunders. The Reb recognizes that the boys have become men. Reuven tells the Reb that he is going to become a rabbi. Reb Saunders acknowledges that Danny has chosen a different path; Danny has a brilliant mind and cannot be satisfied within the confines of a Hasidic environment. The Reb trusts that Danny will become a tzaddik for the world in his practice of psychology.
Danny and Reuven graduate from Hirsch College. When Danny comes to say good-bye to Reuven and Mr. Malter before leaving for graduate school at Columbia University, Reuven notices that Danny has shaved his beard and cut off his earlocks, two symbols of the Hasidic faith. Mr. Malter says that Columbia University is not so far away, so Danny should visit them often. The novel ends as Danny agrees to visit the Malters and then leaves.