A 37-year-old Toru Watanabe has just arrived in Hamburg, Germany. When he hears an orchestral cover of the Beatles' song "Norwegian Wood", he is suddenly overwhelmed by feelings of loss and nostalgia. He thinks back to the 1960s, when so much happened that touched his life.
Watanabe, his classmate Kizuki, and Kizuki's girlfriend Naoko are the best of friends. Kizuki and Naoko are particularly close and feel as if they are soulmates, and Watanabe seems more than happy to be their enforcer. This idyllic existence is shattered by the unexpected suicide of Kizuki on his 17th birthday. Kizuki's death deeply touches both surviving friends; Watanabe feels the influence of death everywhere, while Naoko feels as if some integral part of her has been permanently lost. The two of them spend more and more time together going for long walks on Sundays, although feelings for each other are never clarified in this interval. On the night of Naoko's 20th birthday, she feels especially vulnerable and they have sex, during which Watanabe realizes that she is a virgin. Afterwards, Naoko leaves Watanabe a letter saying that she needs some time apart and is quitting college to go to a sanatorium.
These events are set against a backdrop of civil unrest. The students at Watanabe's college go on strike and call for a revolution. Inexplicably, the students end their strike and act as if nothing had happened, which enrages Watanabe as a sign of hypocrisy.
Watanabe is befriended by a fellow drama classmate, Midori Kobayashi. She is everything that Naoko is not — outgoing, vivacious, and supremely self-confident. Despite his love for Naoko, Watanabe finds himself attracted to Midori as well. Midori reciprocates his feelings, and their friendship grows during Naoko's absence.
Watanabe visits Naoko at her secluded mountain sanatorium near Kyoto. There he meets Reiko Ishida, an older patient there who has become Naoko's confidante. During this and subsequent visits, Reiko and Naoko reveal more about their past: Reiko talks about the cause of her downfall into mental illness and details the failure of her marriage, while Naoko talks about the unexpected suicide of her older sister several years ago.
When he returns to Tokyo, Watanabe unintentionally alienates Midori through both his lack of consideration of her wants and needs, and his continuing thoughts about Naoko. He writes a letter to Reiko, asking for her advice about his conflicted affections for both Naoko and Midori. He does not want to hurt Naoko, but he does not want to lose Midori either. Reiko counsels him to seize this chance for happiness and see how his relationship with Midori turns out.
A later letter informs Watanabe that Naoko has killed herself. Watanabe, grieving and in a daze, wanders aimlessly around Japan, while Midori — with whom he hasn't kept in touch — wonders what has happened to him. After about a month of wandering, he returns to the Tokyo area and gets in contact with Reiko, who leaves the sanatorium to come visit. The middle-aged Reiko stays with Watanabe, and they have sex. It is through this experience, and the intimate conversation that Watanabe and Reiko share that night, that he comes to realise that Midori is the most important person in his life. After he sees Reiko off, Watanabe calls Midori to declare his love for her. Midori asks, "Where are you now?", and the novel ends with Watanabe pondering that question.