An 10-year-old girl named India Opal Bologna has just moved to a trailer park in the small town of Naomi, Florida, with her father who is known as The Preacher because he preaches at the local church. While in the Winn-Dixie supermarket, Opal sees a scruffy dog wrecking the store. Opal claims the dog is hers (but it is not), and takes it home to The Preacher. Opal christens the dog Winn-Dixie, after the supermarket. She asks her father to list ten things about her mother, who abandoned them.
Miss Franny Block, a librarian, shares great stories about her past including one about her great-grandfather, whose family members died while he was fighting for the South in the Civil War. He invented Littmus Lozenge candies, which tasted like root beer and strawberry but included a secret ingredient— sorrow. Anyone who tasted the candies tasted sweetness mixed with sadness. In Because of Winn-Dixie, these candies symbolize that even though life sometimes deals people a bit of sadness, there is always much to appreciate. Opal learns that her sour faced neighbor, Amanda Wilkinson, lost her brother Carson because he drowned. She vows to be nicer to her from then on.
Opal finds a dog collar that she wants to buy for Winn-Dixie but she has no money and decides to work for the pet store to earn it. Otis, owner of the pet shop, is unwilling to hire Opal as a cleaning girl, but she comes to work. When Opal and Winn-Dixie step into the store, the animals panic when they see the big dog. Otis plays his guitar to calm them. Opal learns that Otis once went to jail for hurting a police officer after he was told that he could not play his guitar on the street because he was disturbing others.
Opal was riding her bike while Winn-Dixie pulled ahead and they meet a woman named Gloria Dump. They become good friends. Opal and recovering alcoholic Gloria Dump decide to host a small party, inspired by the party in Gone With the Wind, inviting everyone they know. In the process, Opal becomes a friend to her former enemies, the brothers Stevie and Dunlap Dewberry. She also invites Amanda Wilkinson and Sweetie Pie Thomas, a girl who has no pet, and so had fallen in love with Winn-Dixie. Otis and Miss Franny Block are also invited.
They set up everything outside, but it starts to rain, so they bring the party inside. Opal can't find Winn-Dixie anywhere, even after searching the town. Ten minutes later she returns to Gloria's home to discover that Winn-Dixie had been there all the time, hiding because he is scared of storms. The book ends with Otis playing his guitar and everyone singing one of The Preacher's songs.