Hesse narrates Out of the Dust in the first person, allowing Billie Jo Kelby, the protagonist, or main character, to describe her life from the winter of 1934 through the fall of 1935. Hesse writes the novel in free-verse poems, from firsthand fictionalized events, in the form of journal entries. The novel is historical. Hesse depicts the harsh reality of the Oklahoma Panhandle during the Great Depression. The Oklahoma Panhandle, located in the southwestern Great Plains region of the United States, was known as the Dust Bowl. During the 1920s and 1930s, farmers plowed up grasslands to plant wheat. Drought, violent dust storms, and tornadoes that hit the area caused soil erosion. Consequently, the farmers and their families suffered unbelievable hardship and poverty.
Billie Jo is 14 years old when Out of the Dust begins. She lives near Joyce City, Oklahoma, located in the Oklahoma Panhandle, during the Great Depression of the 1930s, with her mother and father. Despite the continual dust storms, Billie Jo and her parents struggle to make the best of a grim situation by living their lives as normally as possible. Her father, a wheat farmer, works what is left of the farm and her mother, a tall, skinny, rather plain woman, spends the majority of her time cleaning house. Billie Jo helps Ma with the house cleaning, a chore that is never-ending because the dust and grit seeps into the house through every crack. Billie Jo's mother is pregnant. The baby's arrival is a long-awaited event that her family is looking forward to.
Overall, Billie Jo is quite content. She is able to attend school regularly and is the top eighth-grade student in the state of Oklahoma, according to the results of a statewide test. She is saddened when her best friend Livvie leaves the Dust Bowl and moves to California with her family and when rabbits are killed because they are eating farmers' crops, the only vegetation left for them to eat. Billie Jo's joy in life is to play the piano. Her mother, an accomplished pianist, taught her to play when Billie Jo was only five years old. Although she doesn't play as well as her mother, Billie Jo puts her heart into her music and plays a "fierce" piano.
When Arley Wanderdale, the music teacher at Billie Jo's school, asks her to play the piano at the Palace Theatre with his band, the Black Mesa Boys, and Mad Dog Craddock (a singer and friend to Billie Jo), she is ecstatic. Ma gives her permission to play, and Billie Jo feels like she is in heaven. To Billie Jo, there is nothing better than playing the piano while the audience snaps their fingers, taps their feet, and sways to the music. Billie Jo is an excellent entertainer, and Arley Wanderdale knows it. He asks Billie Jo to travel to neighboring towns with him and the Black Mesa Boys during the summer months. Billie Jo's mother reluctantly agrees to let her go because she will be supervised by Vera, Arley's wife, and will be earning a little money — something Billie Jo's family desperately needs.
In July, Billie Jo's life changes dramatically as a result of a horrific accident. Her father leaves a pail of kerosene next to the stove. Thinking it is a pail of water; her mother picks it up to make her father some coffee. The kerosene immediately catches fire. Her mother runs outside to get her father, and Billie Jo — trying to save the house from going up in flames — throws the flaming pail of kerosene out the door. The pail of flaming kerosene splashes onto her mother, who is right in its path. Billie Jo uses her hands to beat out the flames that engulf her mother. Billie Jo's hands are badly burned and her mother, suffering from severe burns, dies giving birth to a baby boy a month later. The baby only lives a few days, and Billie Jo names her dead brother Franklin (after President Franklin Delano Roosevelt). Franklin is buried in his mother's arms.
Billie Jo grieves for her mother and baby brother. She is in pain both emotionally and physically. She feels guilty because she blames herself for their deaths. She blames her father, too, and is angry with him for leaving the kerosene next to the stove. She questions whether she can ever forgive him — or herself. Billie Jo takes over her mother's chores, but because her hands are so badly burned, she is in agony. The physical pain she experiences is so great that it prevents her from playing the piano. Billie Jo's father is also grieving. He has lost his wife and son and is losing his farm and crops. He becomes depressed and withdrawn, treating Billie Jo as though she is invisible. He is unable to comfort or reassure her, and they become strangers living under the same roof. Her father deals with his grief by digging a big hole for an eventual pond, following through on a suggestion that Billie Jo's mother had provided weeks ago. He soon takes a job working long hours for Wireless Power.
Life goes on for Billie Jo and her father. Dust storms and the aftermath have become a common occurrence. Billie Jo is lonely. Most people feel sorry for her because she is motherless. She has few friends and is grateful to Mad Dog, because he sees her for who she is and treats her as friend, not as a pitiful victim.
After hearing about a talent contest hosted by the Palace Theatre, Billie Jo decides to enter. She practices on the piano at school, unable to play on her mother's piano at home because her feelings of guilt and her grief consume her. While competing in the contest, Billie Jo plays her heart out and wins third prize, but not without paying a price — her hands "scream with pain for days." Billie Jo tries to play the piano again, but she can't; she feels like a "cripple." Her father begins to take adult education classes at night, just in case the farm doesn't make it and he has to make a living some other way. Billie Jo receives a letter from Aunt Ellis inviting her to live in Lubbock, Texas. Billie Jo puts the letter on the shelf over her mother's piano, as a reminder that she has an escape from the Dust Bowl.
Noticing that her father has spots on his skin that look just like his father's skin cancer, Billie Jo decides to leave before her father leaves her (she is afraid he will die of skin cancer). She jumps on a freight train and travels in a boxcar as far as Flagstaff, Arizona. Her intention is to get out of the Dust Bowl and never go back. On her journey, she realizes that she cannot get "out of the dust" because the dust is a part of her. She is able to feel compassion for her father, to understand his grief, and to forgive him and ultimately forgive herself. She returns home with a deeper understanding of her father and herself.
Billie Jo and her father redefine their relationship and once again become a family. Her father meets Louise, a teacher at the night school he attended, and she becomes a special person in his life. Billie Jo is able to accept Louise as part of their family and understands that spirit, hopes, and dreams can be rekindled with love.