In Lorain, Ohio, 9-year-old Claudia MacTeer and her 10-year-old sister Frieda live with their parents, who take two other people into their home: Mr. Henry, a tenant, and Pecola Breedlove, a temporary foster child whose house was burned down by her wildly unstable father, Cholly: a man widely gossiped about in the community. Pecola is a quiet, passive young girl with a hard life, whose parents are constantly fighting, both verbally and physically. Pecola is continually reminded of what an "ugly" girl she is, fueling her desire to be white with blue eyes. Most chapters' titles are extracts from the Dick and Jane paragraph in the novel's prologue, presenting a white family that may be contrasted with Pecola's; perhaps to incite discomfort, the chapter titles contain much sudden repetition of words or phrases, many cut-off words, and no interword separations.
The novel, through flashbacks, explores the younger years of both of Pecola's parents, Cholly and Pauline, and their struggles as African-Americans in a largely White Anglo-Saxon Protestant community. Pauline now works as a servant for a wealthier white family. One day in the novel's present time, while Pecola is doing dishes, a drunk Cholly rapes her. His motives are largely confusing, seemingly a combination of both love and hate. After raping her a second time, he flees, leaving her pregnant.
Claudia and Frieda are the only two in the community that hope for Pecola's child to survive in the coming months. Consequently, they give up the money they had been saving to buy a bicycle, instead planting marigold seeds with the superstitious belief that if the flowers bloom, Pecola's baby will survive. The marigolds never bloom, and Pecola's child, who is born prematurely, dies. In the aftermath, a dialogue is presented between two sides of Pecola's own deluded imagination, in which she indicates strangely positive feelings about her rape by her father. In this internal conversation, Pecola speaks as though her wish has been granted: she believes that she now has blue eyes.
Claudia, as narrator a final time, describes the recent phenomenon of Pecola's insanity and suggests that Cholly (who has since died) may have shown Pecola the only love he could by raping her. Claudia lastly laments on her belief that the whole community, herself included, have used Pecola as a sort of scapegoat to make themselves feel prettier and happier.