The God of Small Things tells the story of one family in the town of Ayemenem in Kerala, India. Its epigraph is a quotation from contemporary writer John Berger: "Never again will a single story be told as though it's the only one." She uses this idea to establish her nonlinear, multi-perspective way of storytelling, which gives value to points of view as "Big" as a human being's and as "Small" as a cabbage-green butterfly's. In Roy's world, there is no definitive story, only many different stories that fuse to form a kaleidoscopic impression of events.
The novel opens with Rahel's return to Ayemenem after hearing that her twin brother, Estha, has come home. We switch to the funeral of Sophie Mol, when the twins are seven years old. Rahel believes that Sophie is awake during her funeral and buried alive. The rest of the family refuses to acknowledge the twins and Ammu. On the train ride back to Ayemenem, Ammu cannot speak except to say "He's dead ... I've killed him." Rahel and Estha have not seen each other since Estha was sent away as a child to live with Babu in Assam. Both twins have traveled somewhat aimlessly until returning to their childhood home. Rahel looks out on the family's former factory, Paradise Pickles & Preserves, and contemplates how all the strangeness in her family resolves around the incident of Sophie Mol's death.
Next, we find the family traveling to Cochin to greet Sophie Mol and her mother, Margaret Kochamma, upon their arrival from England. On their way, they see their servant, Velutha, marching with a group of Communists. Back in the present, Rahel watches Estha undress in the moonlight, neither of them saying a word.
The narrative returns to Cochin, where the family goes to see The Sound of Music in the cinema. Inside the theater, Estha cannot stop singing, so he is sent out into the lobby, where the Orangedrink Lemondrink man molests him. After he becomes nauseated, the family leaves the movie early. Rahel senses that the Orangedrink Lemondrink man has wronged Estha and talks back to Ammu when she praises the man. Ammu tells her that she loves Rahel a little less, a statement that haunts Rahel for a long time.
Back in the present, Rahel runs into Comrade Pillai, and he shows her a photograph of the twins and Sophie, taken shortly before Sophie died. In a flashback to Sophie's arrival at the Cochin airport, Rahel cannot handle the nervousness surrounding her cousin's arrival, and she is scolded for hiding in the window curtain. Everyone tries to impress Sophie and Margaret Kochamma with new clothing, English sayings, and forced upbeat attitudes.
The narrative turns to Ammu's death at the age of thirty-one. After being banished from the Ayemenem House, she dies while out of town on a job interview. Estha watches her body being pushed into the cremation oven. No one writes to Estha to inform him of Ammu's death. Roy introduces the refrain, "Things can change in a day."
Back at Sophie Mol's welcome ceremony, a crowd gathers to sing and eat cake. Rahel retreats to play with Velutha. As Ammu watches her daughter and handyman together, she is attracted to Velutha for the first time.
Rahel joins Estha, who is alone in the pickle factory. They plan to visit the History House, where the Paravans live. They push an old, decrepit boat into the river and row to Velutha's side of the river. There, he promises to fix the boat for them. Velutha is trying to suppress his growing love for Ammu despite his constant association with her children. (Ammu dreams of a one-armed man making love to her.)
Back in the present, Rahel watches fondly as Estha bathes in the moonlight. The twins meet by coincidence at a temple, where they watch kathkali dancers act out a violent story of retribution all night.
We turn to the story of Chacko's and Magaret Kochamma's marriage. It began happily but soon crumbled because of a sense of disconnection. Margaret left Chacko for Joe, who later died in an accident. After that, she took Sophie to Ayemenem as a distraction; she can never forgive herself for leaving Sophie alone in Ayemenem the day she died.
We finally hear the story of Sophie Mol's death and the events surrounding it. Vellya Paapen comes to Mammachi's door and offers to kill Velutha with his bare hands for having an affair with Ammu. Baby Kochamma makes sure that Ammu is locked in her room and that the police think he raped Ammu. Mammachi summons Velutha to her house and fires him, banishing him from the property on pain of death. He goes to Comrade Pillai for help but to no avail. Roy begins to call Velutha "The God of Loss" and "The God of Small Things." The telling of Sophie's actual death is short. She joins the twins as they run away after Ammu insults them terribly. After their boat capsizes in the river, she drowns. The twins fall asleep on the veranda of the History House, unaware that Velutha is sleeping there. The next morning, the police come across the river to arrest Velutha. They beat him nearly to death and take the twins to the station with them. There, Baby Kochamma pressures Estha into saying Velutha is guilty of kidnapping him and Rahel. She tells him that doing so is the only way to save Ammu and avoid a life in jail. Estha complies, thus saving Baby Kochamma from being arrested for filing a false report about Velutha. After that, Baby Kochamma coerces Chacko into evicting Ammu from the house and forcing Estha to go live with Babu. As Estha leaves on the train, Rahel cries as though a part of her is being ripped out of her body.
Back in the present, Estha and Rahel finally share a fond moment in Ammu's former bedroom. They make love out of "hideous grief" for the deaths of Ammu, Velutha, and Sophie Mol.
The final chapter describes the first night of Ammu's and Velutha's affair. They are both drawn to the riverbank, where they meet and make love for the first time. After that, they continue to meet in secret and share their admiration of "Small Things" such as the creatures of the riverbank. Each night as they part, they say to one another: "Tomorrow? Tomorrow." On the last night they meet before Velutha's death, Ammu is compelled to turn back and repeat one more time: "Tomorrow."