Holden begins his story at Pencey Preparatory, an exclusive private school (fictional, though based on Salinger's own experience at Valley Forge Military Academy) in Agerstown, Pennsylvania, on the Saturday afternoon of the traditional football game with rival school Saxon Hall. Holden ends up missing the game. As manager of the fencing team, he loses their equipment on a New York City subway train that morning, resulting in the cancellation of a match. He goes to the home of his history teacher named Mr. Spencer. Holden has been expelled and isn't to return after Christmas break, which begins the following Wednesday. Spencer is a well-meaning but long-winded middle-aged man. To Holden's annoyance, Spencer reads aloud Holden's history paper, in which Holden wrote a note to Spencer so his teacher wouldn't feel bad about failing him in the subject.
Holden returns to his dorm, which is quiet because most of the students are still at the football game. Wearing the new red hunting cap he bought in New York City, he begins re-reading a book (Out of Africa), but his reverie is temporary. First, his dorm neighbor Ackley disturbs him, although Holden is quite patient about it. Then later, he argues with his roommate Stradlater, who fails to appreciate a composition that Holden wrote for him about Holden's late brother Allie's baseball glove. A womanizer, Stradlater has just returned from a date with Holden's old friend Jane Gallagher. Holden is distressed that Stradlater might have taken advantage of Jane. Stradlater doesn't appreciate Jane in the manner in which Holden does; he even refers to Jane as "Jean." They fight; Stradlater wins easily. Holden decides he has had enough of Pencey Prep and catches a train to New York City, where he plans to stay in a hotel until Wednesday, when his parents expect him to return home for New Years vacation.
He checks into the dilapidated Edmont Hotel. After observing the behavior of the "perverts" in the hotel room facing his, he struggles with his own sexuality. He states that although he has had opportunities to lose his virginity, the timing never felt right and he was always respectful when a girl declined. He spends an evening dancing with three tourist women in their 30s from Seattle in the hotel lounge and enjoys dancing with one, but ends up with only the check (to pay). He is disappointed that the women seem unable to carry a conversation. Following an unpromising visit to Ernie's Nightclub in Greenwich Village, Holden agrees to have a prostitute named Sunny visit his room. His attitude toward the girl changes the minute she enters the room; she seems about the same age as he is. Holden becomes uncomfortable with the situation, and when he tells her that all he wants to do is talk, she becomes annoyed and leaves. Even though he still pays her the right amount for her time, she returns with her pimp Maurice and demands more money. Sunny takes five dollars from Holden's wallet, Maurice punches Holden in the stomach.
After a short sleep, Holden, lonely and in need of personal connection, telephones Sally Hayes, a familiar date, and they agree to meet that afternoon to attend a play. Holden leaves the hotel, checks his luggage at Grand Central Station and has a late breakfast. He meets two nuns, one an English teacher, with whom he discusses Romeo and Juliet. Holden shops for a special record, "Little Shirley Beans," for his 10-year-old sister Phoebe. He likes this record and knows Phoebe will enjoy it. He spots a small boy singing "If a body catch a body coming through the rye", which makes him feel less depressed. The play he sees with Sally features Broadway stars Alfred Lunt and Lynn Fontanne. Afterward Holden and Sally go skating at Rockefeller Center. While drinking Coke, Holden impulsively invites Sally to run away with him to the wilderness. She declines, acts uninterested, and is too arrogant to try and understand Holden's point of view. Her responses deflate Holden's mood, prompting him to remark: "You give me a royal pain in the ass, if you want to know the truth." He regrets it immediately, apologizing many times. Sally won't accept his apology and doesn't let him take her home. She states, "No boy ever said that to me in my entire life." Sally storms off as Holden follows, pleading with her to accept his apology. When she won't do so and gets angry, Holden finally leaves. After that, Holden sees the Christmas show at Radio City Music Hall, endures a film, and gets very drunk. Throughout the novel, Holden has been worried about the ducks in the lagoon at Central Park. He tries to find them but breaks Phoebe's record in the process, causing him to almost cry. He feels that he may not be good enough, and the record was the only thing he thought he had to offer to his sister. Exhausted physically, mentally, and financially, Holden heads home to see Phoebe.
Holden recalls the Museum of Natural History, which he often visited as a child. He contrasts his evolving life with the statues of Eskimos in a diorama: whereas the statues have remained unchanged through the years, he and the world have not. Eventually, he sneaks into his parents' apartment while they are out, to visit his younger sister—and close friend—Phoebe, the only person with whom he seems to be able to communicate his true feelings. Holden shares a selfless fantasy he has been thinking about (based on a mishearing of Robert Burns' Comin' Through the Rye): he pictures himself as the sole guardian of thousands of children playing an unspecified 'game' in a huge rye field on the edge of a cliff. His job is to catch the children if, in their abandon, they come close to falling off the brink; to be, in effect, the "catcher in the rye". Because of this misinterpretation, Holden believes that to be the "catcher in the rye" means to save children from losing their innocence.
When his parents come home, Holden slips out and visits his former and much-admired English teacher, Mr. Antolini, who offers advice on life along with a place to sleep for the night. Mr. Antolini, quoting psychologist Wilhelm Stekel, advises Holden that wishing to die for a noble cause is the mark of the immature man, while it is the mark of the mature man to aspire to live humbly for one. This is at odds with Holden's ideas of becoming a "catcher in the rye", symbolically saving children from the evils of adulthood. During the speech on life, Mr. Antolini has a number of cocktails served in highball glasses. Holden is upset when he wakes up in the night to find Mr. Antolini patting his head in a way that he regards as "flitty" (homosexual). It makes Holden feel very uncomfortable and embarrassed. Confused and uncertain, he leaves as dawn is breaking and spends most of Monday morning wandering the city. He questions whether his interpretation of Mr. Antolini's actions was actually correct, and seems to wonder how much it matters anyway.
Holden makes the decision that he will head out west and live as a deaf-mute. When he explains this plan to Phoebe Monday at lunchtime, she wants to go with him. Holden declines her offer, which upsets Phoebe, so Holden decides not to leave after all. Phoebe was looking forward to acting in a play that Friday. Despite outward frustration, it is clear Holden wants Phoebe to be happy and safe, and he didn't think she would be if she left with him. "I think I hated her most because she wouldn't be in that play any more if she went away with me." He tries to cheer her up by taking her to the Central Park Zoo, and as he watches her ride the zoo's carousel, he is filled with happiness and joy at the sight of Phoebe riding in the rain.
At the conclusion of the novel, Holden decides not to mention much about later events up to the present day, finding them inconsequential. He alludes to "getting sick" and living in some sort of institution, and mentions he will be attending another school in September; he relates that he has been asked whether he will apply himself properly to his studies this time around and wonders whether such a question has any meaning before the fact. Holden says that he doesn't want to tell anything more because surprisingly he has found himself missing two of his former classmates, Stradlater and Ackley, and even Maurice, the pimp who punched him. He warns the reader that telling others about their own experiences will lead them to miss the people who shared them.