In 1923, protagonist and narrator Charles Ryder, an undergraduate studying history at a college very like Hertford College, Oxford, is befriended by Lord Sebastian Flyte, the younger son of the aristocratic Lord Marchmain and an undergraduate at Christ Church. Sebastian introduces Charles to his eccentric and aesthetic friends, including the haughty and homosexual Anthony Blanche. Sebastian also takes Charles to his family's palatial mansion, Brideshead Castle, in Wiltshire where Charles later meets the rest of Sebastian's family, including his sister Julia.
During the long summer holiday Charles returns home to London, where he lives with his widowed father, Edward Ryder. The conversations there between Charles and Edward provide some of the best-known comic scenes in the novel. Charles is called back to Brideshead after Sebastian incurs a minor injury, and Sebastian and Charles spend the remainder of the holiday together.
Sebastian's family are Roman Catholic, which influences the Flytes' lives as well as the content of their conversations, all of which surprises Charles, who had always assumed Christianity was "without substance or merit". Lord Marchmain had converted from Anglicanism to Roman Catholicism to marry his wife, but he later abandoned both his marriage and his new religion, and moved to Venice, Italy. Left alone, Lady Marchmain focuses even more on her faith, which is also enthusiastically espoused by her eldest son, Lord Brideshead ("Bridey"), and by her youngest daughter, Cordelia.
Sebastian, a troubled young man, descends into alcoholism, drifting away from the family over a two-year period. He flees to Morocco, where his drinking ruins his health. He eventually finds some solace as an under-porter and object of charity at a Catholic monastery in Tunisia.
Sebastian's drifting leads to Charles's own estrangement from the Flytes. Charles marries and fathers two children, but he becomes cold towards his wife, and she is unfaithful to him. He eventually forms a relationship with Sebastian's younger sister Julia. Julia has married but separated from the rich but unsophisticated Canadian businessman Rex Mottram. This marriage caused great sorrow to her mother, because Rex, though initially planning to convert to Roman Catholicism, turns out to have divorced a previous wife in Canada, so he and Julia ended up marrying without fanfare in an Anglican church that accepts divorced people.
Charles and Julia plan to divorce their respective spouses so that they can marry each other. On the eve of the Second World War, the ageing Lord Marchmain, terminally ill, returns to Brideshead to die in his ancestral home. Appalled by the marriage of his eldest son Brideshead to a middle-class widow past childbearing age, he names Julia heir to the estate, which prospectively offers Charles marital ownership of the house. However, Lord Marchmain's return to the faith on his deathbed changes the situation: Julia decides she cannot enter a sinful marriage with Charles, who has also been moved by Lord Marchmain's reception of the sacraments.
The plot concludes in the early spring of 1943 (or possibly 1944 – the date is disputed). Charles is "homeless, childless, middle-aged and loveless". He has become an army officer, after establishing a career as an architectural artist, and finds himself unexpectedly billeted at Brideshead, which has been taken into military use. He finds the house damaged by the army, but the private chapel, closed after Lady Marchmain's death in 1926, has been reopened for the soldiers' worship. It occurs to him that the efforts of the builders – and, by extension, God's efforts – were not in vain, although their purposes may have appeared, for a time, to have been frustrated.