While on an airplane descending to Hamburg Airport, Toru Watanabe hears the Beatles song "Norwegian Wood" played over the speakers and is overcome by painful memories of his past. He remembers a meadow where he and Naoko, the girl he loved, walked 18 years ago when he was still 19.
Toru grew up in Kobe with Kizuki as his best and only friend. Along with Naoko, who was Kizuki's girlfriend and childhood friend, Toru and Kizuki formed an inseparable small group. However, their lives were torn apart in their second year of high school when Kizuki inexplicably committed suicide. Independent of each other, both Toru and Naoko decide to leave their hometown for Tokyo to attend university, where they run into each other in 1968 in their first year. The two end up going on dates every Sunday, simply walking extensively throughout the city; meanwhile, Toru deals with his stuttering and eccentrically neat roommate, nicknamed "Storm Trooper," and gets to know Nagasawa, a charismatic and egoistic upperclassman in the dorm. Nagasawa begins to take him out some nights to find random girls to sleep with.
On Naoko's 20th birthday, Toru comes over to her apartment, and when she breaks down into tears he comforts her and then has sex with her. The next day he tries to contact her again, but later finds that she has moved. Concerned, he sends her a letter. Meanwhile, Toru meets Midori Kobayashi, an underclassman in his drama class with a vibrant and quirky personality who seems to have taken an interest in him. A few weeks later Midori invites him over to her house, and while watching a house fire from her balcony they kiss.
Toru receives a letter from Naoko explaining that she has gone to Ami Hostel, a special kind of sanatorium, to recover from psychological problems she has been having. Toru visits her there and meets Reiko Ishida, a woman in her late thirties who is Naoko's roommate. Reiko explains that at the sanatorium, located in the middle of a remote forest, people do not try to cure but rather adapt to their individual deformities. That night Toru sees Naoko in the moonlight by his bed, and mysteriously she reveals her naked body to Toru, astounding him with its perfection.
During Toru's stay, Reiko and Naoko separately tell him their life stories. Reiko was an aspiring concert pianist until a nervous breakdown derailed her career; and then her mental problems made it difficult for her to have a normal life until a man married her and promised to take care of her. However, due to an incident in which a young piano student of hers manipulated her, she had another nervous breakdown, after which she came to the sanatorium. Naoko tells Toru about how she witnessed her older sister's suicide.
Upon returning to Tokyo, Toru feels disoriented, as though he left part of himself in the quiet world of Ami Hostel. However, Midori revitalizes him by taking him drinking. Later she takes him to the hospital where her father is dying of brain cancer, and Toru bonds with the man, who dies within a week. Around this time, Nagasawa invites Toru to a dinner with his girlfriend Hatsumi; at the dinner, the couple falls out over Nagasawa's inability to consider Hatsumi's feelings.
Toru makes another visit to Ami Hostel to see Naoko and then moves from the dorm into a house. Due to his ignoring her, Midori angrily refuses to speak with Toru, and this combined with news from Reiko that Naoko's condition is worsening sends Toru into a depression. However, he manages to pull himself out of it. He and Midori come to realize that they love each other, but they agree to wait while Toru tries to understand his relationship with Naoko.
Out of nowhere, Toru receives news that Naoko has killed herself; grief-stricken, he spends a month traveling alone aimlessly away from Tokyo. However, he feels compelled to return and restart his life. Reiko leaves the sanatorium to visit, and together the two hold a small funeral for Naoko involving Reiko playing every song she knows on the guitar. Afterwards, Reiko sleeps with Toru, and then the next day she leaves for a new life in Hokkaido. Some time later from some unknown place, Toru calls Midori telling her that he needs her.