Just after the end of World War I, Shadrack, a black, shell-shocked veteran, is released from the military hospital where he is being treated for battle stress. Alone and disoriented, Shadrack drifts back to his home in the Bottom, where he becomes known for his eccentricity and for creating National Suicide Day, January 3, a day once a year on which people can commit suicide and not be stigmatized for doing so.
Helene Sabat, the daughter of a New Orleans prostitute, marries Wiley Wright, a man from the Bottom, and establishes a respectable home there. During a journey by train back to New Orleans to visit her ailing, beloved grandmother, she is humiliated by a bigoted white conductor. Her daughter, Nel, watches and vows never to let anyone belittle her so cruelly.
One-legged Eva Peace, her daughter Hannah, and Hannah's child, Sula, live in a large house filled with friends, extended family, and assorted boarders. The matriarchal Eva rules the household from a rocking chair fitted into a child's wagon. Her son, Plum, returns from World War I emotionally wrecked and sinks under his sadness into alcoholism and drug addiction. Eva's devotion to Plum does not allow her to watch him decay, so, after rocking him to sleep one night, she kills him by dousing his bed with kerosene and lighting it.
Sula and Nel begin a friendship and are soon threatened by a gang of harassing Irish Catholic white boys. Sula slices off the tip of her finger as a warning to the boys, and neither she nor Nel is bothered by them again. One day, on the bank of a river, Sula is swinging a little boy named Chicken Little around in circles when he accidentally slips from her hands, lands in the river, and drowns. Sula and Nel tell no one what happened.
Soon after Chicken Little's death, Hannah catches her dress on fire while she is lighting a cooking fire in the yard. From her second-floor bedroom, Eva sees her daughter burning and flings herself out of the upper-story window, hoping to reach Hannah and smother the flames. Hannah dies on the way to the hospital. As Eva, severely hurt by her fall, recovers in the hospital, she remembers seeing Sula standing on the boardinghouse's porch, doing nothing except just watching her mother burn to death.
When Nel marries Jude Greene, Sula leaves the Bottom. Ten years later, she returns, quarrels with Eva, and places her in a nursing home. Shortly thereafter, Nel discovers Jude and Sula naked together and severs all ties with her childhood best friend; Jude leaves Nel and moves to Dayton, Ohio. Sula begins a relationship with a man named Ajax, but he ends the affair when Sula begins acting more like a wife than a lover.
A few years later, Sula is dying, and Nel briefly visits her. When Sula finally dies, she mystically remains conscious: She is outside of her body looking down at it. She realizes that death is painless, something she must tell Nel.
The novel now jumps twenty-five years forward, and Nel is visiting Eva in the nursing home. Eva's mind is disoriented, yet she accuses Nel of complicity with Sula in Chicken Little's death. Nel walks away from the nursing home filled with nostalgic heartache for her longtime friend, Sula, and terrible regret for the long, lost years of her own adulthood.