Silas Marner, a weaver, is an eager and promising young member of a Puritan religious community, Lantern Yard. Marner's supposed best friend, Willam Dane, frames him for the theft of a pouch of coins. Marner suffers from cataleptic fits which leave him as insensible as stone and vulnerable to Dane's frame-up. The community of Lantern Yard draws lots to determine Marner's guilt or innocence in the crime. After the lots proclaim Marner guilty, he flees from Lantern Yard, utterly crushed, leaving behind his faith in God and in humankind.
Marner eventually settles at the outskirts of Raveloe, a provincial village in the English Midlands. The villagers appreciate Marner's trade but find him strange and unapproachable. Marner seems to have supernatural powers--he is able to heal a local woman using herbal arts he learned from his mother--but the villagers of Raveloe do not know his background and thus find his knowledge diabolical and threatening. Marner, for his part, is content to live a life of almost total solitude in his simple cottage beside the Stone-pits.
Marner has one joy in life: gold. The gold coins that he earns at his loom represent for him all the meaning that he has lost, and the faces printed on the coins serve as his only company. He spends as little as he can in order to save more coins, which he hides in two leather bags in a hole in his cottage floor.
Meanwhile, Raveloe is the home of other wealthy citizens. Its most wealthy and distinguished family are the Casses. Squire Cass has two sons, Godfrey Cass and Dunstan Cass, who tend to cause trouble. Dunstan recently talked his older brother into embezzling rent money from one of the Squire's tenants. The Squire threatens to evict the tenant unless he can pay his rent. In order to replace the money they stole, Godfrey, a weak-willed pawn of his younger brother, agrees to sell his magnificent horse, Wildfire. The next day, while Godfrey attends a dance with Nancy Lammeter, the love of his life, Dunstan will sell Wildfire at a hunt.
But Godfrey has bigger problems than making good on the embezzling debt. Some time before, he rashly married a barmaid named Molly Farrell, who lives in a town to the north. This woman over time has turned into a laudanum addict and an alcoholic. Godfrey is hopelessly miserable, because not only does he loathe his decision to marry Molly, he is also deprived of marrying Nancy. He thus spends his days drinking away his sorrows, seeing Nancy when he can and putting off his seemingly inevitable fall from grace.
Dunstan sells Wildfire. But Dunstan then uses Wildfire in the hunt, in the course of which he impales Wildfire on a hedge-stake, killing the horse. Dunstan hatches a scheme to collect his money anyway. He knows well the rumor that Silas Marner, the crazy weaver, has hidden in his cottage a large hoard. He decides to stop by the weaver's cottage and use his leverage to "borrow" Marner's gold.
The night is foggy and dark when Dunstan finally arrives at Marner's cottage. When Marner doesn't answer, Dunstan invites himself in. After a quick search he finds Marner's gold and flees with it.
Marner returns from a short trip into the village to find his gold missing. Devastated, he rushes into Raveloe for assistance and ends up at the Rainbow tavern, where the locals have gathered for pints and conversation. At first the villagers are terrified of Marner. But eventually his sincerity wins them over, and they form a posse to fetch the constable and search for clues.
After several weeks of searching, the only clue uncovered is a tinder-box, which the villagers recall as having belonged to a suspicious travelling pedlar whom no one can find. Marner is left without his gold, utterly miserable, yet having made some headway in connecting with village life. The villagers pity Marner now more than they fear him, and they even bring him gifts of solace.
Nobody thinks much of Dunstan Cass's absence. He has been known to run off before, and given that he killed Wildfire, nobody doubts that he has good reason to lay low. Godfrey is left with the unpleasant task of approaching his father about the embezzled money. The Squire is miffed, to be sure, but he ends up forgiving Godfrey, who thus maintains his status quo in misery.
The Christmas season arrives at Raveloe, and Marner is visited by Mrs. Dolly Winthrop, a conscientious and charitable soul, whose conversation gives him a little bit of Christmas cheer. But Marner is beyond cheering up. Godfrey Cass, meanwhile, abandons himself to his rotten fate and decides to make the most of the present. He attends the annual Red House ball, still wishing to marry Nancy.
At the same time Godfrey Cass's wife trudges through the snow towards Raveloe, carrying with her their two-year-old daughter. She plans to surprise Godfrey and everyone else, but on the way she is gripped by a need for laudanum. She drinks her drug just outside of Silas Marner's cottage and slips into an opium stupor. Her two-year-old daughter, seeing the lights in Marner's cottage, toddles over to the weaver's door. His door is open. She enters and falls asleep on his hearth, next to his fire.
At the time of the baby girl's entry, Marner is having a cataleptic fit. He awakes from the fit to see the baby girl, whom he at first mistakes for his gold come back again. After feeding and caring for the child, Marner realizes that she must have come in from outside. He follows her footprints in the snow until he reaches the stone-cold body of her mother.
Taking the child with him, Marner makes his way into the Red House ball in order to alert the doctor about the woman. Godfrey Cass looks at the ghastly apparition of Marner holding his child and nearly passes out from the shock. He volunteers himself as one of the party to go out and check on the woman, his only concern being that she is, in fact, dead.
And, yes, she is dead. Godfrey finds himself--miracle of miracles--single again. He instantly proposes to Nancy and determines to use this stroke of fortune to his advantage: he will live a good life, raise a family he can be proud of, and be the most sober and responsible man in Raveloe.
Silas Marner grows fiercely attached to the child he found curled up on his hearth. She comes to replace his gold as the object of his love, yet unlike his gold she is living and developing as she grows. He reaches out to the community for help in raising his newly adopted daughter. He christens her "Eppie" in the Raveloe church. Though the community is at first surprised, they more or less support him in his act of charity--otherwise, she would have ended up in the orphans' workhouse. Mrs. Winthrop in particular guides Marner by means of her care and experience.
The narrative moves sixteen years ahead in time. Marner, a happy, proud old father of a beautiful, nature-loving daughter, is now planning to build a garden with Eppie. She, meanwhile, plans to marry Aaron Winthrop, Mrs. Winthrop's industrious son, as well as to be a loving companion to her father for the rest of his days.
Sixteen years have not been so good to Godfrey Cass and his wife Nancy. Their plans to have children have not amounted to anything but a tragic infant death, while Nancy rejects Godfrey's ensuing conviction that they ought to adopt Eppie as their own daughter. Godfrey has kept the secret that he is in fact Eppie's biological father for the whole sixteen years.
Godfrey drains the Stone-pits to clear new land, which results in a shocking discovery at the bottom: Dunstan's skeleton. And with Dunstan lies Marner's gold coins. The coins are restored to him. Godfrey, seeing that time makes known all painful truths, finally reveals his secret to Nancy. Nancy is not angry at Godfrey but disappointed that he did not tell her sooner, because on that basis they could have raised Eppie as their own. With the truth finally known, the Casses decide that it is their duty to offer their parentage to Eppie.
That very night they call on Marner and Eppie in their cottage. They make known that they want to adopt Eppie as their own daughter, figuring that both she and Marner would delight at her chance to join the most famous family in Raveloe. When Eppie refuses, saying she is happy at the cottage with Marner, Godfrey Cass reveals that she is his biological daughter. Marner stands up to Godfrey, saying that he passed up the blessing of Eppie when he had his chance, and that he has no right to the child now. Eppie, too, refuses his parentage. The Casses exit Marner's cottage, their hope for a child again defeated.
This visit reawakens in Marner the desire to show Eppie the country of his birth. They plan a trip to Lantern Yard, where Marner may also discover whether he was ever cleared of theft. The two of them travel four days north until they arrive at a manufacturing town. Nobody in the town remembers Lantern Yard, but Marner is able to find the place where his religious community once stood. Lantern Yard is no more. The site of the settlement has been transformed into a factory. Marner returns to Raveloe with Eppie, resigned to entrust himself to the good that he knows is in the world rather than beyond it.
Eppie gets married the following summer to Aaron Winthrop, and the Casses furnish the entire wedding. Marner's cottage also has been much improved by his new landlord, Godfrey Cass. Though he cannot claim Eppie for his daughter, Godfrey still pays off his debt of conscience in small, material ways. Eppie, Silas, Mrs. Winthrop and Aaron close the novel, looking at the fine new garden that, with Mr. Cass's help, they now have to tend and enjoy. "Oh father," Eppie says to Silas, "what a pretty house! I think nobody could be happier than we are!"