The book is set in 1954 and revolves around the life of U.S Marshall Teddy Daniels, as well as his partner, Chuck, as they travel to Shutter Island, a home for the criminally insane. There has been a missing criminal on the island, Rachel Solando, who they are attempting to find again.
As they are investigating, Teddy suspects that there is one more person on the island who is not meant to be present. They also discover on the wards that the criminals are being tested with psychotropic drugs. Teddy himself is desperate to find the missing criminal and speaks to an inmate who tells him that he should not trust Chuck.
Teddy then learns of a woman claiming to be Rachel Solando and she is hiding out in one of the caves. She reveals that his food and drugs have been spiked with the psychotropic drugs. He then tries to find Chuck, who is missing. He then heads off to the lighthouse, where he believes the experiments are being conducted on the criminals.
He then finds Dr. Cawley, who reveals himself to be Andrew Laeddis, the man who killed Teddy’s wife, Dolores. Andrew is actually Teddy himself, and Rachel is his wife Dolores, who he killed after she killed their children. Chuck arrives and it is shown that Chuck is actually Dr. Sheehan, his psychiatrist. They have given him the drugs to help him live his fantasy out in his mind.
However, it is ambiguous as to which is the true version of events. So readers are left unknowing about who Teddy really is.