Set in the small town of Guadalupe, New Mexico just after World War II, Antonio Márez y Luna (Tony) tells his story from the memories of his adult self, who harkens back to his childhood and reflects on his growing up. Anaya uses the basic structure of the Bildungsroman to weave a tale from the child's point of view of good and evil, of life and death, of myth and reality that challenges young Tony's beliefs about God, his family and his destiny. His progress in learning about life is grounded in Ultima, an aged and wise member of the community who is highly respected by Tony's parents. Tony has a very special relationship with her, as she was the midwife at his birth. Throughout the story she passes on her wisdom and knowledge to Tony.
The novel begins as Tony's parents, Gabriel and Maria, invite Ultima to come and live with them when Tony is about to turn seven—just reaching the age of reason. As Tony, with Ultima's guidance, searches for his true identity and his rightful destiny, he witnesses several deaths, assists Ultima in purging his uncle Lucas of an evil spell, experiences a crisis of faith in the Catholic tradition, embraces the myth of the golden boys carp, discovers the sordidness of his older brother, survives a harrowing illness and realizes that he may be the only heir to the cultural and spiritual legacy that was Ultima, for Ultima is the last of her kind.
Throughout the novel Tony struggles with his identity. In the first chapter Anaya establishes the roots of this struggle through Tony's dream—a flashback to the day of his birth. In his dream Tony views the differences between his parents' familial backgrounds. His father's side, the Márez (descendents of the sea), are the restless vaqueros who roam the llanos and seek adventure. The Lunas, his mother's side, are the people of the moon, religious farmers whose destiny is to homestead and work the land. Each side of the family wants control of the newborn's future. But, as the dream ends, Ultima intercedes and takes on the responsibility for knowing and guarding Tony's destiny herself. His mother's dream is for him to become a Roman Catholic priest, His father's dream is to embark on a new adventure and move west to California with his sons to recapture the openness of the Llano he has foregone in moving to the town.
Early on Antonio must come to grips with the opposition between good and evil. Ultima, in her role as protector, uses her knowledge of healing and magic to neutralize the evil witchcraft the three daughters of Tenorio Trementina have wrought on Tony's uncle, and toward the end her soul struggles against the evil of Tenorio himself.
Over the course of the novel Antonio becomes disillusioned with the faith and through Cico, one of his closer friends learns of another god. Throughout the novel Tony keeps trying to reconcile the complexity of his mixed familial heritage Lunas with the Márez,and his mixed religious heritage: traditional Catholicism with the Native American religion.
Early on Tony's experience preparing for and making his First Communion, the second rite of passage of the Catholic Church, leaves him disillusioned as he did not receive the spiritual knowledge he had expected. He begins to question the value of the Catholic Church, concentrated on the Virgin Mary and a Father God, and on ritual, as unable to answer his moral and metaphysical dilemmas. At the same time, realizing that the Church represents the female values of his mother, Tony cannot bring himself to accept the lawlessness, violence and unthinking sensuality which his father and older brothers symbolize. Instead through his relationship with Ultima, he discovers a oneness with nature. Through his discovery that "All is One" he is able to resolve the major existential conflict in his life.
Antonio realizes at the end of the novel that the tension he feels as he is pulled between the free, open landscape of the llano, and the circumscribed river valley of the town, between the Márez's way of being and that of the Lunas, and between Catholicism and the indigenous religion of the golden carp, does not require him to choose one over the other. He can bring both together to form a new identity and a new religion that is made up of both. Antonio says to his father:
Take the llano and the river valley, the moon and the sea, God and the golden carp--and make something new... Papa, can a new religion be made?