Absalom, Absalom! details the rise and fall of Thomas Sutpen, a white man born into poverty in western Virginia who comes to Mississippi with the complementary aims of gaining wealth and becoming a powerful family patriarch. The story is told entirely in flashbacks narrated mostly by Quentin Compson to his roommate at Harvard University, Shreve, who frequently contributes his own suggestions and surmises. The narration of Rosa Coldfield, and Quentin's father and grandfather, are also included and re-interpreted by Shreve and Quentin, with the total events of the story unfolding in non-chronological order and often with differing details. This results in a peeling-back-the-onion way of revealing the true story of the Sutpens. Rosa initially narrates the story, with long digressions and a biased memory, to Quentin Compson, whose grandfather was a friend of Sutpen’s. Quentin's father then fills in some of the details to Quentin. Finally, Quentin relates the story to his roommate Shreve, and in each retelling, the reader receives more details as the parties flesh out the story by adding layers. The final effect leaves the reader more certain about the attitudes and biases of the characters than about the facts of Sutpen's story.
Thomas Sutpen arrives in Jefferson, Mississippi, with some slaves and a French architect who has been somehow forced into working for him. Sutpen obtains one hundred square miles of land from a local Native American tribe and immediately begins building a large plantation called Sutpen’s Hundred, including an ostentatious mansion. All he needs to complete his plan is a wife to bear him a few children (particularly a son to be his heir), so he ingratiates himself with a local merchant and marries the man’s daughter, Ellen Coldfield. Ellen bears Sutpen two children, a son named Henry and a daughter named Judith, both of whom are destined for tragedy.
Henry goes to the University of Mississippi and meets fellow student Charles Bon, who is ten years his senior. Henry brings Charles home for Christmas, and Charles and Judith begin a quiet romance that leads to a presumed engagement. However, Thomas Sutpen realizes that Charles Bon is his son from an earlier marriage and moves to stop the proposed union.
Sutpen had worked on a plantation in the French West Indies as overseer and, after subduing a slave uprising, was offered the hand of the plantation owner's daughter, Eulalia Bon. She bore him a son, Charles. Sutpen had not known that Eulalia was of mixed race until after the marriage and birth of Charles, but when he found out that he had been deceived, he renounced the marriage as void and left his wife and child (though leaving them his fortune as part of his own moral recompense). The reader also later learns of Sutpen's childhood, when young Thomas learned that society could base human worth on material worth. It is this episode that sets into motion Thomas' plan to start a dynasty.
Henry, possibly because of his own potentially (and mutually) incestuous feelings for his sister, as well as quasi-romantic feelings for Charles himself, is keen to see the two wed (allowing him to imagine himself as surrogate for both). When Sutpen tells Henry that Charles is his half-brother and that Judith must not be allowed to marry him, Henry refuses to believe it, repudiates his birthright, and accompanies Charles to his home in New Orleans. They then return to Mississippi to enlist in their University company, joining the Confederate Army to fight in the Civil War. During the war, Henry wrestles with his conscience until he presumably resolves to allow the marriage of half-brother and sister; this resolution changes, however, when Sutpen reveals to Henry that Charles is part black. At the conclusion of the war, Henry enacts his father's interdiction of marriage between Charles and Judith, killing Charles at the gates to the mansion and then fleeing into self-exile.
Thomas Sutpen returns from the war and begins to repair his dynasty and his home, whose hundred square miles have been reduced by carpetbaggers and punitive northern action to one. He proposes to Rosa Coldfield, his dead wife's younger sister, and she accepts. However, Sutpen insults Rosa by demanding that she bear him a son before the wedding takes place, prompting her to leave Sutpen's Hundred. Sutpen then begins an affair with Milly, the fifteen-year-old granddaughter of Wash Jones, a squatter who lives on the Sutpen property. The affair continues until Milly becomes pregnant and gives birth to a daughter. Sutpen is terribly disappointed, because the last hope of repairing his Sutpen dynasty rested on Milly giving birth to a son. Sutpen casts Milly and the child aside, telling them that they are not worthy of sleeping in the stables with his horse, who had just sired a male. An enraged Wash Jones kills Sutpen, his own granddaughter, and Sutpen's newborn daughter, and is in turn killed by the posse that arrives to arrest him.
The story of Thomas Sutpen's legacy ends with Quentin taking Rosa back to the seemingly abandoned Sutpen’s Hundred plantation, where they find Henry Sutpen and Clytie, the daughter of Thomas Sutpen by a slave woman. Henry has returned to the estate to die. Three months later, when Rosa returns with medical help for Henry, Clytie mistakes them for law enforcement and starts a fire that consumes the plantation and kills Henry and herself. The only remaining Sutpen is Jim Bond, Charles Bon's black grandson, a young man with severe mental handicaps, who remains on Sutpen's Hundred.