I Know Why the Caged Bird Sings follows Marguerite's (called "My" or "Maya" by her brother) life from the age of three to 17 and the struggles she faces – particularly with racism – in the Southern United States. Abandoned by their parents, Maya and her older brother Bailey are sent to live with their paternal grandmother (Momma) and crippled uncle (Uncle Willie) in Stamps, Arkansas. Maya and Bailey are haunted by their parents' abandonment throughout the book – they travel alone and are labeled like baggage.
Many of the problems Maya encounters in her childhood stem from the overt racism of her white neighbors. Although Momma is relatively wealthy because she owns the general store at the heart of Stamps' Black community, the white children of their town hassle Maya's family relentlessly. One of these "powhitetrash" girls, for example, reveals her pubic hair to Momma in a humiliating incident. Early in the book, Momma hides Uncle Willie in a vegetable bin to protect him from Ku Klux Klan raiders. Maya has to endure the insult of her name being changed to Mary by a racist employer. A white speaker at her eighth grade graduation ceremony disparages the Black audience by suggesting that they have limited job opportunities. A white dentist refuses to treat Maya's rotting tooth, even when Momma reminds him that she had loaned him money during the Depression. The Black community of Stamps enjoys a moment of racial victory when they listen to the radio broadcast of Joe Louis's championship fight, but generally they feel the heavy weight of racist oppression.
A turning point in the book occurs when Maya and Bailey's father unexpectedly appears in Stamps. He takes the two children with him when he departs, but leaves them with their mother in St. Louis, Missouri. Eight-year-old Maya is sexually abused and raped by her mother's boyfriend, Mr. Freeman. He is found guilty during the trial, but escapes jail time and is murdered, presumably by Maya's uncles. Maya feels guilty and withdraws from everyone but her brother. Even after returning to Stamps, Maya remains reclusive and nearly mute until she meets Mrs. Bertha Flowers, "the aristocrat of Black Stamps", who encourages her through books and communication to regain her voice and soul. This coaxes Maya out of her shell.
Later, Momma decides to send her grandchildren to their mother in San Francisco, California, to protect them from the dangers of racism in Stamps. Maya attends George Washington High School and studies dance and drama on a scholarship at the California Labor School. Before graduating, she becomes the first Black female streetcar conductor in San Francisco. While still in high school, Maya visits her father in southern California one summer, and has some experiences pivotal to her development. She drives a car for the first time when she must transport her intoxicated father home from an excursion to Mexico. She experiences homelessness for a short time after a fight with her father's girlfriend.
During Maya's final year of high school, she worries that she might be a lesbian (which she equates with being a hermaphrodite), and initiates sexual intercourse with a teenage boy. She becomes pregnant, which on the advice of her brother, she hides from her family until her eighth month of pregnancy in order to graduate from high school. Maya gives birth at the end of the book.