The protagonist in the story is Nell, a thete (or person without a tribe; equivalent to the lowest working class) living in the Leased Territories, a lowland slum belt on the artificial, diamondoid island of New Chusan, located offshore from the mouth of the Yangtze River, northwest of Shanghai. At the age of four, Nell receives a stolen copy of an interactive book, Young Lady's Illustrated Primer: a Propædeutic Enchiridion, in which is told the tale of Princess Nell and her various friends, kin, associates, &c., originally intended for the wealthy Neo-Victorian "Equity Lord" Chung-Sik Finkle-McGraw's granddaughter. The story follows Nell's development under the tutelage of the Primer, and to a lesser degree, the lives of Elizabeth and Fiona, girls who receive similar books. The Primer is intended to steer its reader intellectually toward a more interesting life, as defined by "Equity Lord" Alexander Chung-Sik Finkle-McGraw, and growing up to be an effective member of society. The most important quality to achieving an "interesting life" is deemed to be a subversive attitude towards the status quo. The Primer is designed to react to its owners' environment and teach them what they need to know to survive and develop.
The Diamond Age is characterized by two intersecting, almost equally-developed story lines: Nell's education through her independent work with the Primer, and the social downfall of engineer and designer of the Primer, John Percival Hackworth, who has made an illegal copy of the Primer for his own young daughter, Fiona. His crime becomes known both to Lord Finkle-McGraw and to Dr. X, the black market engineer whose compiler Hackworth used to create the copy of the Primer, and each man attempts to exploit Hackworth to advance the opposing goals of their tribes. The text also includes fully narrated educational tales from the Primer that map Nell's individual experience (e.g. her four toy friends) onto archetypal folk tales stored in the primer's database. Although The Diamond Age explores the role of technology and personal relationships in child development, its deeper and darker themes also probe the relative values of cultures (which Stephenson explores in his other novels as well) and the shortcomings in communication between them.