Old Major, the old boar on the Manor Farm, calls the animals on the farm for a meeting, where he compares the humans to parasites and teaches the animals a revolutionary song, "Beasts of England".
When Major dies three days later, two young pigs, Snowball and Napoleon, assume command and turn his dream into a philosophy. The animals revolt and drive the drunken and irresponsible Mr. Jones from the farm, renaming it "Animal Farm".
The Seven Commandments of Animalism are written on the wall of a barn. The most important is the seventh, "All animals are equal." All the animals work, but the workhorse, Boxer, does more than others and adopts the maxim — "I will work harder."
Snowball attempts to teach the animals reading and writing; food is plentiful; and the farm runs smoothly. The pigs elevate themselves to positions of leadership and set aside special food items ostensibly for their personal health. Napoleon takes the pups from the farm dogs and trains them privately. When Mr. Jones tries retaking the farm, the animals defeat him at what they call the "Battle of the Cowshed." Napoleon and Snowball struggle for leadership. When Snowball announces his idea for a windmill, Napoleon opposes it. Snowball makes a speech in favour of the windmill, whereupon Napoleon has his dogs chase Snowball away. In Snowball's absence, Napoleon declares himself leader and makes changes. Meetings will no longer be held and instead a committee of pigs will run the farm.
Using a young pig named Squealer as a mouthpiece, Napoleon announces that Snowball stole the idea for the windmill from him. The animals work harder with the promise of easier lives with the windmill. After a violent storm, the animals find the windmill annihilated. Napoleon and Squealer convince the animals that Snowball destroyed the windmill, although the scorn of the neighbouring farmers suggests the windmill's walls were too thin. Once Snowball becomes a scapegoat, Napoleon begins purging the farm, killing animals he accuses of consorting with Snowball. Meanwhile, Boxer takes up a second maxim: "Napoleon is always right."
Napoleon abuses his powers, making life harder for the animals; the pigs impose more control while reserving privileges for themselves. The pigs rewrite history, villainizing Snowball and glorifying Napoleon. Squealer justifies every statement Napoleon makes, even the pigs' alteration of the Seven Commandments of Animalism. "No animal shall sleep in beds" is changed to "No animal shall sleep in beds with sheets" when the pigs are discovered to have been sleeping in the old farmhouse. "No animal shall drink alcohol" is changed to "No animal shall drink alcohol to excess" when the pigs discover the farmer's whisky. "Beasts of England" is banned as inappropriate, as according to Napoleon the dream of Animal Farm has been realized. It is replaced by an anthem glorifying Napoleon, who appears to be adopting the lifestyle of a man. The animals, though cold, starving, and overworked, remain convinced through psychological conditioning that they are better off than they were when ruled by Mr. Jones. Squealer abuses the animals' poor memories and invents numbers to show their improvement.
Mr. Frederick, one of the neighbouring farmers, swindles Napoleon by buying old wood with forged money, and then attacks the farm, using blasting powder to blow up the restored windmill. Though the animals win the battle, they do so at great cost, as many, including Boxer, are wounded. Boxer continues working harder and harder, until he collapses while working on the windmill. Napoleon sends for a van to take Boxer to the veterinarian, explaining that better care can be given there. Benjamin the donkey, who "could read as well as any pig", notices that the van belongs to "Alfred Simmonds, Horse Slaughterer and Glue Boiler", and attempts to mount a rescue; but the animals' attempts are futile. Squealer reports that the van was purchased by the hospital and the writing from the previous owner had not been repainted. He recounts a tale of Boxer's death in the hands of the best medical care. Shortly after Boxer's death, it is revealed that the pigs have purchased more whisky.
Years pass, and the pigs learn to walk upright, carry whips, and wear clothes. The Seven Commandments are reduced to a single phrase: "All animals are equal, but some animals are more equal than others." Napoleon holds a dinner party for the pigs and the humans of the area, who congratulate Napoleon on having the hardest-working animals in the country on the least feed. Napoleon announces an alliance with the humans, against the labouring classes of both "worlds". He abolishes practices and traditions related to the Revolution, and reverts the name of the farm to "Manor Farm".
The animals, overhearing the conversation, notice that the faces of the pigs have begun changing. During a poker match, an argument breaks out between Napoleon and Mr. Pilkington when they both play the Ace of Spades, and the animals realize that the faces of the pigs look like the faces of humans and no one can tell the difference between them