Amelia Sedley, of good family, and Rebecca Sharp, an orphan, leave Miss Pinkerton's academy on Chiswick Mall to live out their lives in Vanity Fair — the world of social climbing and search for wealth. Amelia does not esteem the values of Vanity Fair; Rebecca cares for nothing else.
Rebecca first attempts to enter the sacred domain of Vanity Fair by inducing Joseph Sedley, Amelia's brother, to marry her. George Osborne, however, foils this plan; he intends to marry Amelia and does not want a governess for a sister-in-law. Rebecca takes a position as governess at Queen's Crawley, and marries Rawdon Crawley, second son of Sir Pitt Crawley. Because of his marriage, Rawdon's rich aunt disinherits him.
First introduced as a friend of George Osborne, William Dobbin becomes the instrument for getting George to marry Amelia, after George's father has forbidden the marriage on account of the Sedley's loss of fortune. Because of George's marriage, old Osborne disinherits him. Both young couples endeavor to live without sufficient funds. George dies at Waterloo. Amelia would have starved but for William Dobbin's anonymous contribution to her welfare. Joseph goes back to his post in India, claiming such valor at Waterloo that he earns the nickname "Waterloo Sedley." Actually he fled at the sound of the cannon. Both Rebecca and Amelia give birth to sons.
Rebecca claims she will make Rawdon's fortune, but actually she hides much of her loot, obtained from admiring gentlemen. When she becomes the favorite of the great Lord Steyne, she accumulates both money and diamonds. In the meantime innocent Rawdon draws closer to Lady Jane, wife of Rawdon's older brother, Pitt, who has inherited from the rich aunt.
When Rawdon discovers Rebecca in her treachery, he is convinced that money means more to her than he or the son whom she has always hated. He refuses to see her again and takes a post in Coventry Island, where he dies of yellow fever.
Because her parents are starving and she can neither provide for them nor give little Georgy what she thinks he needs, Amelia gives up her son to his grandfather Osborne. William Dobbin comes back from the service, reconciles old Osborne to Amelia, whereat Osborne makes a will leaving Georgy half of his fortune and providing for Amelia.
Rebecca, having lost the respectability of a husband, wanders in Europe for a couple of years and finally meets Joseph, Georgy, Amelia, and William on the Continent. Rebecca sets about to finish what she started to do at the first of the book — that is, to ensnare Joseph. She does not marry him, but she takes all his money and he dies in terror of her, the implication being that she has, at least, hastened his death.
At the end of the book Rebecca has the money necessary to live in Vanity Fair; she appears to be respectable. William has won Amelia. Rebecca has been the one who jolted Amelia into recognition that George, her first love, wasn't worthy.
Little Rawdon, upon the death of his uncle Pitt and his cousin Pitt, becomes the heir of Queen's Crawley. Little George, through the kindness of Dobbin, has lost his distorted values obtained in Vanity Fair. The reader feels that these young persons of the third generation will be better people than their predecessors in Vanity Fair.