A Northern Light's feisty sixteen-year-old narrator Mathilda "Mattie" Gokey has strong morals and is highly intelligent. She lives in the Adirondack Mountains of northern New York—the "North Woods" in her words—during 1906. Mattie dreams of going to Barnard College in New York City. While she is smart enough to go, she is not allowed. Her mother died and her brother Lawton left home because of a fight with their father. Later in the story the reader discovers that Lawton thinks his father killed their mother by working her too hard, giving her cancer. There is no one to work on the farm except Mattie and her three younger sisters, Abby, Lou, and Beth. Her family struggles with money, so they can't send a girl with two good working hands to college.
Mattie's passion is reading and writing. Every day, she looks up a new word in her dictionary so that she can educate herself and become more articulate. Her best friend, Weaver Smith, is also intelligent and has large aspirations. Weaver is African-American and is as strong in math as Mattie is in literature. Weaver is the one who shows Mattie's writings to their teacher, Mrs. Wilcox, which prompts her to send an application to Barnard College for Mattie. The application yields a "full scholarship" to Barnard but when she does the math, she knows she can't afford to buy the books and a train ticket, or to leave her father with her three young sisters to run the farm.
Mattie soon finds out that Mrs. Wilcox clandestinely writes feminist poetry, which is unwelcome in the world of literature. She writes about the lack of rights for women, which is a sensitive subject at the turn of the century. Many people think poorly of her, but she keeps writing, encouraging Mattie to do the same.
Mattie doesn't give up completely on going to college. Mother had made her promise to pursue knowledge, and Mattie intends to. She cleans her rich and nosy Aunt Josie's house every week and tries to ask her for money, but Aunt Josie tells Mattie she is being selfish to try and leave the farm and the family, like her brother Lawton. Aunt Josie refuses to give Mattie money.
Mattie, a romantic, is jealous of her friend, Minnie's, loving relationship with her husband Jim. Later on in the novel, Mattie helps Minnie give birth to her twins.
The novel is written in alternating chapters from the past and present. In the past, Mattie explains her life on the farm; in the present she works at The Glenmore, a hotel on Big Moose Lake, to earn money during the summer. The body of Grace Brown is found in the lake near the hotel. Earlier that day, Grace had asked Mattie to burn a pack of letters. Mattie didn't have time to burn them. She is drawn in by the mystery of what they might say, and she begins to read them. They reveal some shocking information about Grace's lover, Chester Gillette, who checked into the hotel as Carl Grahm. Grace was pregnant with Chester's child at the time, so he killed her.
Royal Loomis is also a major part of this story. He has recently developed a crush on Mattie, but she can't figure out why. She thinks she is plain, bookish, and too smart for her own good. Even though Mattie knows she likes Royal, she continues to push him away because she doesn't think he likes her for the right reasons. Despite the rejection, it draws Royal even closer. Still young and naive, Royal's continuous advances make Mattie nervous, but she can't resist. She compares Royal to the characters in books she reads, and makes herself think that he is as heroic as the literary characters. He tries to connect with her by giving her a book for her seventeenth birthday. Unfortunately, he gives her a cookbook, which is a backhanded gift that shows he wants her to be just like other girls. Mattie is more confused than ever with Royal's insincere advances. Unfortunately, all of the mixed feelings that she has for Royal end up being pointless because, in the end, he only likes her because he wanted to get a part of her land.
Emmie Hubbard is Mattie's lonely, poor, and depressed neighbor who has seven children. Emmie is having an affair with a married man, Frank Loomis (Royal's father). Royal resents the Hubbards because he thinks his father treats them better than his own family.
After Weaver's house is set on fire by the same people that attacked him while he was running an errand at the train station and all of his saved college money is stolen, Emmie steps up and invites Weaver's mother, Aleeta, to stay with her in her home. Now Emmie has a good, strong-willed woman to clean her up and help her with a business to make money. Weaver's mother has a place to stay where she is needed.
In the end, Mattie makes the incredibly difficult choice to leave the North Woods and go to school in New York City. She leaves in the morning, and the only person she tells is Weaver. She writes three letters, one to her father, one to Royal, and one to Weaver's mother. To her father, she leaves two dollars and a promise that she will keep in touch. To Royal she leaves the ring that he gave to her when he proposed. Finally, to Weaver's mother she leaves just enough money to pay off Emmie's taxes. She also gives Weaver money for a train ticket to college. As her closest friend, Weaver does not want her to leave but he understands that she is going to make a better life for herself. Though she feels incredibly guilty for leaving, she can't help but also feel excited, scared, and willing. She has made her peace with Grace because she decided to show the letters to the world so now every one can see the true, tragic story of Grace Brown. She is now ready to leave it behind, and keep her life in the North Woods as a memory.