One Flew Over the Cuckoo's Nest takes place in a mental institution in the Pacific Northwest. The narrator of the novel is Chief Bromden, also known as Chief Broom, a catatonic half-Indian man whom all of the inmates and staff assume is deaf and dumb. Bromden often suffers from hallucinations during which he feels the room filling with a dense, overwhelming fog generated by a huge mechanized matrix called The Combine which controls everyone in its grasp. The institution is dominated by Nurse Ratched (Big Nurse), a cold, precise woman with calculated gestures and a calm, mechanical manner. When the story begins, a new patient, Randall Patrick McMurphy, arrives at the ward. He is a self-professed “gambling fool” who has just come from a work farm at Pendleton as part of his sentence for statutory rape. He clearly is completely sane and lucid, at the hospital only to avoid the work detail. Others on the ward include Dale Harding, the president of the patient's council, and Billy Bibbit, a thirty-year-old who stutters and appears very young. Ratched immediately pegs McMurphy as a manipulator.
During the first therapy meeting, Nurse Ratched begins examining Harding's difficulties with his wife. McMurphy takes the opportunity to explain his arrest for statutory rape, suggesting that the girl was of legal age and certainly more than consenting. Dr. Spivey, the main doctor for the ward, questions whether McMurphy is now feigning insanity to get out of doing hard labor at the work farm. Afterward, McMurphy confronts Harding about the way the inmates defer to Ratched so readily. He suggests it is a “pecking-party” in which the patients are to turn on each other. Harding admits that all of the patients and even Dr. Spivey are afraid of the Big Nurse. He adds that the patients are rabbits who cannot adjust to their rabbithood and need Big Nurse to show them their place. McMurphy bets him that he can get Nurse Ratched to crack within a week.
McMurphy awakens early the next morning to take a shower. He complains to one of the black boys who serve as Nurse Ratched's henchmen that the patients are only allowed to brush their teeth at certain times. When Ratched arrives, McMurphy stands in front of her in a towel, claiming that his clothes have been taken. He threatens to drop his towel (though he has shorts on). Ratched screams to one of the boys to get McMurphy some new clothes.
McMurphy then complains to Ratched about the loud music that constantly plays on the ward, but she refuses to turn it down. He suggests opening the tub room as a game room, but she refuses. At the next group meeting, Dr. Spivey mentions casually that he talked to McMurphy about opening up the tub room as a game room and thinks that it is a great idea. The other inmates ratify the plan while Nurse Ratched's hands begin to shake—her first significant sign of weakness.
McMurphy next pushes for a schedule change so the patients can watch the World Series during the day and do their work at night. He attempts to motivate the patients to push for the schedule change, but he becomes angry at them when they act too “chicken-shit” and refuse to oppose Ratched. Billy Bibbit tells McMurphy that nothing he can do will be of any use in the long run, but McMurphy boasts that he will break out of the institution by lifting up the control panel in the tub room and throwing it through the window.
The patients gradually grow more assertive in their opposition to the boys and to Ratched. At another group meeting, after Billy discusses his stutter and having proposed to a woman his mother disliked, McMurphy brings up the World Series again. Ratched finally allows a vote. All twenty Acute patients vote for his idea, but Ratched declares it a defeat, for none of the Chronics have had the ability to vote. McMurphy finally motivates Chief Bromden to vote for him, but Ratched says it is too late and the vote is over. As a protest, McMurphy refuses to work and sits down in front of the television while the World Series is on. The other patients join him in this mutiny.
During a staff meeting, the doctors discuss McMurphy with Ratched. They believe that he is no ordinary man and might be dangerous. Ratched, however, claims that McMurphy is not an extraordinary man and is subject to all the fears and timidity of the other men. She is confident that she can break McMurphy, for he is committed to the hospital and they are in control, able to decide when he will be released.
McMurphy continues to behave aggressively, but Ratched does not respond. The other patients revisit longstanding gripes against her, such as the rationing of cigarettes and the tight control over their schedules. When the men make their weekly trip to the pool, McMurphy learns that he will only be released after Nurse Ratched and the doctors decide he is ready. At the next group meeting, Cheswick complains about the rationing of cigarettes, and two of the boys are required to drag him away to the Disturbed Ward. He returns, presumably after having undergone shock treatment. Soon after, Cheswick drowns when he gets his fingers stuck in the grate at the bottom of the pool.
Nurse Ratched reassumes her control over the ward after McMurphy gives up his struggle against her, knowing that she controls whether or not he leaves. On the ward's trip to the library, Harding introduces McMurphy to his visiting wife, Vera. Harding and Vera are rude to one another, and she implies that he is a closeted homosexual, then suddenly leaves. Harding asks McMurphy his opinion, and McMurphy snaps that he will not say how awful Vera is, even if that is what Harding wants to hear. McMurphy says he has his own worries and should not have to deal with others' problems.
While getting chest X-rays for TB in another part of the hospital, McMurphy learns about the Shock Shop, where patients get electroshock therapy, and he learns about lobotomies, partial brain removal designed to tame the wildest patients. He confronts Harding and the other patients about why they never told him directly that Nurse Ratched controls whether or not he leaves. They claim to have forgotten he was involuntarily committed, for with rare exceptions, all of the others entered the hospital voluntarily. McMurphy cannot conceive that these men would choose to live in the hospital, but Billy tells him that they are too weak to leave.
Nurse Ratched closes the tub room that the patients had been using for several weeks, on the ground that the men did not apologize for their behavior during the World Series protest. McMurphy responds by punching the glass at the Nurses' Station. Ratched does little to retaliate because she knows she can prolong the fight. McMurphy requests an Accompanied Pass to go deep-sea fishing and tries to recruit patients to go with him. In response, Ratched posts newspaper clippings about the dangers of boating, which frighten several patients.
McMurphy realizes that Chief Bromden is neither deaf nor dumb. One night McMurphy offers Bromden a pack of chewing gum and gets him to speak about his family. McMurphy suggests that Bromden pick up the control panel in the tub room and throw it through the window so that he can escape. McMurphy signs up Bromden for the fishing trip.
On the day of the trip, Nurse Ratched tries to derail it, for only one of the chaperones (a prostitute named Candy Starr) has arrived instead of two. Dr. Spivey, however, acts as the second chaperone. When they stop for gas on the way to the docks, the gas-station attendant asks if they are patients from the asylum. Dr. Spivey claims that they are merely a work crew, but McMurphy boldly brags that they are criminally insane. At the docks, a couple of men yell disparaging comments about Candy and the patients. McMurphy has trouble securing the boat because they lack a waiver, but he takes the boat without a captain. After a day of fishing, the men return rejuvenated, and the men on the docks no longer mock them.
Nurse Ratched makes her next move against McMurphy by posting the patients' financial statements, which show that McMurphy has made a profit against the other patients since he arrived. She suggests in a meeting that McMurphy is trying to manipulate them. When the men confront McMurphy about this, he admits that he is no saint, but he has been perfectly honest about his intentions. He arranges for Candy to visit the institution for a visit with Billy Bibbit. During a cautionary cleansing that Nurse Ratched orders, several of the black boys harass one of the patients, George Sorenson. McMurphy defends him and gets in a fight with them. Chief Bromden joins in when the black boys gang up on McMurphy, and both men are taken away to the Disturbed Ward.
Down at the Disturbed Ward, a nurse treats McMurphy's and Bromden's wounds and tells them that not every ward is run as autocratically as Nurse Ratched's. The nurse adds that she wishes she could keep patients away from her ward. Ratched gives McMurphy and Bromden a chance to apologize before administering shock treatment. McMurphy refuses. They administer shock treatment to him several times in one week, even though Bromden tries to talk him into complying. McMurphy claims that the electroshock therapy energizes him. When Bromden returns to the ward, Harding congratulates him and tells the Chief that he has heard rumors that McMurphy is not responding at all to the EST. Ratched brings McMurphy back to the ward after she learns that his absence and resistance have led to his becoming an inspirational “legend.”
Harding and the other patients decide to engineer McMurphy's escape when Candy arrives on a Saturday night for her meeting with Billy. They bribe Mr. Turkle, the night watchman, with liquor and an offer of sex with Candy, and the other patients have a party that night. McMurphy delays leaving until early in the morning, however, and falls asleep. The black boys find him the next morning.
When Nurse Ratched arrives, she gathers the patients together in one room to take roll. She realizes that Billy Bibbit is missing. She finds him in the Seclusion Room with Candy. She chastises him for having sex with such a cheap woman, then tells him that she will tell his mother. Billy begins to stutter at this, but she takes him into the doctor's office to calm down. When the doctor arrives, he finds that Billy has cut his throat and killed himself. Ratched blames McMurphy for Billy's suicide, and he responds by trying to strangle her. Although the black boys pull McMurphy off of her before he can kill her, he rips her uniform, exposing her breasts.
Nurse Ratched takes time off to recuperate, and when she returns, she cannot speak. Many of the patients check out of the hospital. Weeks later, McMurphy returns to the ward, now comatose after having a forced lobotomy. Chief Bromden smothers McMurphy with a pillow in order to put him out of his misery, then throws the control panel in the tub room through the window and escapes the institution, fulfilling McMurphy's escape plan for himself.