Briefly, The Man in the High Castle is a "fictional picture of a world divided by Germany and Japan, victors of the second World War".
In the novel's parallel history, U.S. President Franklin Roosevelt was assassinated in 1933, leading to the continuation of the Great Depression and U.S. isolationism. Thus, the U.S.'s military capability was insufficient to stop the Nazis from exterminating the Soviet Union's Slavic peoples and the Japanese from conquering Oceania. By 1947, the U.S. and the remaining Allies surrendered. By the 1960s, Imperial Japan and Nazi Germany were the world's competing superpowers, with Japan establishing the "Pacific States of America" (P.S.A.) from the former Western United States, with the remaining Rocky Mountain States now a neutral buffer zone between the P.S.A. and the Nazi-occupied former Eastern United States. Meanwhile, Adolf Hitler, though alive, is incapacitated from advanced syphilis, and Martin Bormann has become Chancellor of Germany, with Goebbels, Heydrich, Göring, Seyss-Inquart (who oversees the extermination of the peoples of Africa), and other Nazi leaders soon vying to take his place. The Nazis have drained the Mediterranean to make room for farmland, developed and used the hydrogen bomb, and designed rockets for extremely fast travel across the world as well as space, having colonized the Moon, Venus, and Mars. The novel is set mostly in San Francisco, capital of the P.S.A.
In 1962, fifteen years after Imperial Japan and Nazi Germany have won World War II, Robert "Bob" Childan owns an Americana antiques shop in San Francisco, California (located in the Japanese-occupied Pacific States of America), which is most commonly frequented by the Japanese, who make a fetish of romanticized American cultural artifacts. Childan is contacted by Nobusuke Tagomi, a high-ranking Japanese trade official, who is seeking a gift to impress a visiting Swedish industrialist named Baynes. Childan's store is stocked in part by antiques from the Wyndam-Matson Corporation, a metalworking company. Frank Frink (formerly Fink), a secretly Jewish-American veteran of World War II, has just been fired from the Wyndam-Matson factory, when he agrees to join a former coworker to begin a handcrafted jewellery business. Meanwhile, Frink's ex-wife, Juliana, works as a judo instructor in Canon City, Colorado (in the neutral Mountain States buffer zone), where she begins a sexual relationship with an Italian truck driver and ex-soldier, Joe Cinnadella. Throughout the book, many of these characters frequently make important decisions using prophetic messages they interpret from the I Ching. Many characters are also reading a widely banned yet extremely popular new novel, The Grasshopper Lies Heavy, which depicts an alternative history in which the Allies won World War II, a concept that amazes and intrigues its readers.
Frink exposes that the Wyndam-Matson Corporation has been supplying Childan with counterfeit antiques, which effectively works to blackmail Wyndam-Matson for money to finance Frink's new jewelry venture. Tagomi and Baynes meet, but Baynes repeatedly delays any real business as they await an expected third party from Japan. Suddenly, the public receives news of the death of the recently-ill Chancellor of Germany, Martin Bormann. Childan tentatively, on consignment, takes some of Frink's authentic new metalwork and attempts to curry favor with a Japanese client, who surprisingly considers Frink's jewellery immensely spiritually alive. Juliana and Joe take a road trip to Denver, Colorado, and Joe impulsively decides they should go on a side-trip to meet the mysterious Hawthorne Abendsen, author of The Grasshopper Lies Heavy, who supposedly lives in a guarded fortress-like estate called the "High Castle" in Cheyenne, Wyoming. Soon, Joseph Goebbels is announced as the new German Chancellor.
Baynes and Tagomi finally meet their Japanese contact as two agents of the Nazi secret police, the Sicherheitsdienst (SD), close in to arrest Baynes, who is actually revealed to be a Nazi defector named Rudolf Wegener. Wegener warns his contact, a famed Japanese general, of Operation Dandelion, an upcoming Goebbels-approved plan for the Nazis to surprise-attack the Japanese Home Islands, in order to obliterate them in one swift stroke. As Frink is elsewhere exposed as a Jew and arrested, Wegener and Tagomi are confronted by the SD agents, both of whom Tagomi shoots dead with an antique American pistol. Back in Colorado, Joe abruptly changes his appearance and mannerisms before the trip to the High Castle, leading Juliana to deduce that he intends to actually murder Abendsen. Joe confirms this, revealing himself to be an undercover Swiss Nazi assassin. Juliana mortally wounds Joe and drives off to warn Abendsen of the threat to his life.
Wegener flies back to Germany, while Tagomi remains shaken by the shootout and goes to Childan to sell back the gun he used in the fight; however, instead, sensing the energy from one of Frink's jewels, Tagomi impulsively buys it from Childan, before undergoing a spiritually intense if ambiguous moment where he momentarily perceives an alternative-history version of San Francisco. Later, Tagomi on a whim forces the German authorities to release Frink, whom Tagomi has never personally met and does not know is the maker of the jewel. Juliana soon has her own spiritual experience when she arrives in Cheyenne. There, she discovers that Abendsen now lives in a normal house with his family, having left behind the High Castle due to a change of outlook; he no longer preoccupies himself with thoughts that he might soon be assassinated. After dodging many of Juliana's questions about his inspiration for his novel, Abendsen finally confesses that he in fact used the I Ching to guide his writing of The Grasshopper Lies Heavy. Before leaving, Juliana infers then that "Truth" itself wrote the book in order to reveal the "Inner Truth" that Japan and Germany really lost World War II.