Mr. Tulliver has decided to remove Tom from the academy where he presently studies and send him to a school where he can learn things that will raise him in the world. Mr. Tulliver has indefinite ideas on education, and he seeks advice from an acquaintance, Mr. Riley, whom he judges to be knowledgeable. Mr. Riley, although he has no definite opinions on the subject, recommends Rev. Stelling, the son-in-law of a business acquaintance, as a tutor.
Maggie eagerly awaits Tom's arrival. He comes with gifts for her, but when he finds that his rabbits have died because she neglected them, he repulses her. She retires heartbroken to the attic until Mr. Tulliver forces Tom to coax her down to tea.
Tom and Maggie's aunts and uncles — the Gleggs, Deanes, and Pullets — gather to discuss the boy's education, but Mr. Tulliver has already made up his mind. One result of his hasty decision is a violent quarrel with Mrs. Glegg, to whom he owes five hundred pounds. Tulliver fears that she will call her money in, and he determines to head off that possibility by paying it back at once. His sister's husband, Mr. Moss, has borrowed three hundred pounds from him, and Tulliver rides to see them to ask payment of the debt. But pity for that family's poverty overcomes him, and he lets the debt stand.
Meanwhile, Tom and Maggie with their cousin Lucy and their mother have gone to visit the Pullets. Tom becomes angry when Maggie upsets his cowslip wine and punishes her by paying no attention to her when he takes Lucy off to the pond. Maggie takes revenge by pushing Lucy into the mud. When Tom goes in to tell on her, Maggie runs off to live with the gypsies and be their queen. She finds some gypsies, but they are not what she expects, and she is very frightened before they return her to her father.
Mr. and Mrs. Glegg have been discussing the proposition of calling in her money from Mr. Tulliver. She is at last convinced that it will earn more where it is, and so she is receptive to Mrs. Pullet's suggestion (prompted by Mrs. Tulliver) that it would be best left alone. However, Mrs. Tulliver makes the mistake of telling her husband that Mrs. Pullet has interceded with Mrs. Glegg. He is so angry that he writes to Mrs. Glegg that he will pay in the money at once. To do this he finds it necessary to borrow five hundred pounds from a client of Lawyer Wakem.
Tom turns out to be the only pupil of Rev. Stelling, and he receives the full benefit of an education he does not want and cannot understand, an education consisting chiefly of Latin grammar and geometry. When he goes home at Christmas he learns that his father is about to go to law over water rights against a new neighbor, Mr. Pivart, a client of Wakem. He also learns that Philip Wakem will be his school-fellow after the holiday. On his return to school Tom quickly decides that Wakem is an inconsiderable person, a hunchback who is touchy about his deformity. However, he admires Philip's ability to draw and to tell stories of legendary heroes. During this term Maggie comes to visit Tom and grows friendly with Philip, whose cleverness she admires. Her presence, aided by an injury to Tom's foot, brings about a brief friendship between the two boys, but when Maggie leaves they quickly grow apart again.
It is two-and-a-half years later that Maggie comes to fetch Tom home with the news that their father has lost all his property in the lawsuit with Pivart. Mr. Tulliver has found that the mortgage on his property (taken out to repay Mrs. Glegg) has passed to Wakem. That news has caused him to fall insensible. His property is all to be sold, including Mrs. Tulliver's cherished possessions. The relatives agree to buy in a few things which the Tulliver's need. There is some thought that Mr. Deane's company might buy the mill and retain Mr. Tulliver as manager. Unfortunately, Mrs. Tulliver tries to insure this by smoothing things with Wakem. Her plan goes wrong as Wakem keeps the mill for himself and takes Mr. Tulliver on as a hireling. Tom successfully applies to Mr. Deane for a position with Guest and Company, but his father requires him to swear on the family Bible that he will take vengeance on Wakem.
Maggie's life falls into a round of housework and sewing. This is broken by a visit from Bob Jakin, who has become a packman. Bob brings her a gift of books. One of these turns out to be by Thomas a Kempis, and this book leads her to a life of renunciation of the world until on a walk near her home she meets Philip Wakem. Philip convinces Maggie that she must not give up her desires and offers himself as a friend and tutor.
While Maggie struggles within herself, Tom is at work in the business world. He saves his money to pay off his father's debts, and under Bob Jakin's guidance he goes into speculations of his own. He has just saved up enough money to pay the debts when he discovers that Maggie has been meeting Philip and that they have declared their love for one another. By threatening to tell their father he forces her to give up Philip.
Soon after this the debts are paid. On his first new day as an "honest man," Tulliver meets Wakem at the mill and falls on him with a stick. Maggie tries to hold her father back, but the excitement causes him to take to his bed, and he dies there.
Several years later Maggie visits her cousin Lucy and is introduced to Lucy's love, Stephen Guest. Lucy has invited Philip Wakem to join them, for he is a friend of Stephen's. Maggie finds it necessary to ask Tom's permission to meet Philip. Lucy guesses that there was something between Philip and Maggie and forces Maggie to tell her. She begins to lay plans to bring the two together again.
Tom meanwhile has been doing very well with Guest and Company, and he is offered a share in the business. He proposes that the company try again to buy the mill and make him manager. The outcome is left indefinite as he goes off on business.
A mutual attraction begins to develop between Stephen and Maggie, but both of them resist it. Philip quickly notices it but tries not to believe in it. Lucy never notices it at all; instead, she seizes on the mill as a way of bringing Philip and Maggie together. She gets Philip to maneuver his father into consenting to sell the mill and allowing Philip to marry Maggie. She imagines that Tom will be so pleased at regaining the mill that he will consent to the marriage. Tom will not.
Stephen, in a moment of weakness at a dance, kisses Maggie's arm, and she repulses him. She feels that this frees her, but when she goes to visit her aunt Moss, Stephen comes there seeking forgiveness. They declare their mutual love but determine to part out of respect for Lucy and Philip. But when Maggie returns, Philip becomes convinced that she and Stephen are in love. One morning Lucy goes out of town in order to leave Maggie alone with Philip. Philip was supposed to take the two girls rowing, but he sends Stephen in his place, so that Stephen and Maggie are alone together. Carried away by the current of their emotion, they row down the river past their stopping-point and go on so far that they could not get home before dark. Stephen convinces Maggie that she should go away and be married to him. But by morning Maggie realizes what she has done, and she leaves Stephen and returns home.
Word that she had been seen with Stephen at a town downriver has been brought by Bob Jakin, and when Maggie returns home Tom refuses to allow her in his house. Maggie and her mother take lodging with Bob Jakin, and Maggie finds work as a governess with Dr. Kenn, the clergyman of St. Ogg's. She is looked on as a fallen woman and cast out from local society. Eventually Dr. Kenn is forced to let her go because of persistent rumors that he intends to marry her.
A letter arrives from Stephen asking her to come to him. She is tempted, but resolves not to go. She plans instead to go away and find work. She is praying for guidance when the long-threatened flood breaks into Bob's riverside house. Maggie wakes the family, but in trying to get them into boats she is swept away in a boat by herself. She steers the boat to the mill and rescues Tom. They are going together to find Lucy when they are swept under by floating debris. Their bodies are found and buried together when the flood recedes.