The novel opens with an American son and father, Ralph and Mr. Touchett, and one English man, Lord Warburton, sitting in a garden belonging to a manor called Gardencourt in England. They discuss the great hope of the future, and they believe it lies in the women of their time. They declare that a change is coming. Isabel Archer, the main subject of the novel, then appears on the horizon. Her aunt, Mrs. Touchett, has brought her from America so that she can see the world. Isabel Archer is a young, opinionated woman with many ideas of her own, but little concrete experience or practical knowledge. She is unattached, ambitious and wants to assert her own unique self in life. It is unclear though what she can do in life that could help her realize her ambition.
The novel is a representation of the ambitions of a young woman, and her dismal prospects for realizing her own ideas in a restricted, conventional society. Marriage was often the only possibility for a woman to assert her "success" in society. It is also an exploration of the possibilities of freedom: can one really be a unique, original and free self, without having to rely upon the generosity of others? Can one assert one's own freedom in any other way, other than negatively, by rejecting other people? What does it mean to be an original? What does it mean to be free? How much does one have to take into account the moral claims of other people on one's own person?
Lord Warburton takes an extraordinary step by proposing marriage to Isabel Archer after knowing her for only a short time. He has a great reputation, name, title and plenty of money. This would make him a good husband in the eyes of society. However, Isabel takes the surprising step of turning him down, even though she likes him very much as a person. This makes her very interesting to her cousin Ralph Touchett, who wants to see what a woman who turns down Lord Warburton will do with her life.
Ralph and Isabel go with Isabel's American friend, Henrietta Stackpole, to London for a short trip. There, Caspar Goodwood, Isabel's suitor from America, has arrived in order to follow Isabel. He also would like to marry Isabel. He also has a lot of money and has become well established because of his involvement in the cotton industry. Isabel tries to refuse him, but he insists. She tells him to at least give her two years of freedom from him.
The group returns to Gardencourt, where Ralph Touchett's father has taken ill and is about to die. There, Isabel meets Madame Merle, a friend of Mrs. Touchett. Madame Merle is a very graceful and talented socialite. Isabel is impressed with her. Meanwhile, Ralph Touchett, who has consumption and expects to die young, tells his father that he does not need all the money his father would leave him in his will. Instead, Ralph insists that his father give half of his money to Isabel Archer upon his death. Ralph tells his father he would like to see what Isabel will do when she is granted the material wealth that will allow her to enact her ideas.
Upon Mr. Touchett's death, Mrs. Touchett, Isabel, Ralph, and Madame Merle go to Florence, Italy, where Mrs. Touchett has her own house. Madame Merle introduces Isabel to her friend Gilbert Osmond, an American collector who resides in Florence. He is distinguished by his impeccable taste in art and other commodities. Gilbert Osmond also has a daughter named Pansy. Madame Merle has a plan to get Isabel to marry Gilbert Osmond. Isabel is surprisingly timid in Osmond's presence and is afraid of saying the wrong thing in his presence.
Isabel travels around Europe for half a year, and then goes to Greece and the Asia Minor for another half with Madame Merle. She ends her journey in Rome, where Gilbert Osmond comes to visit her. They become engaged in Rome. Isabel then informs her social acquaintances, beginning with Caspar Goodwood, of her intention to marry Gilbert Osmond. None of them approve. Isabel feels that her act of marrying Gilbert Osmond isolates her from her friends.
Several years later, Isabel finds herself in a loveless marriage. She gives all the appearance to others of being happy, hosting Thursday evening social gatherings and "representing" Gilbert Osmond to the world. But she feels that her husband detests her. He has been unable to change her, to mold her into his image. However they do not ever articulate their dislike for each other; they live civilly, but coolly. Isabel realizes that Osmond is really very shallow, and cares too much about what other people think. He likes to show his superiority to the world by pretending to reject its values in favor of his own ideas, but this is just a show, because he deeply cares about his own image.
When Gilbert Osmond's daughter, Pansy, comes of age to be wed, an impetuous young man named Edward Rosier pursues her. He asks for assistance from Madame Merle and Isabel. However, Gilbert Osmond believes that Mr. Rosier is neither rich enough for his daughter, nor well respected enough. Gilbert Osmond and Madame Merle would like Isabel to help them marry Pansy to Lord Warburton. They want Isabel to use Lord Warburton's devotion to Isabel to accomplish this. Isabel ultimately does not want to bring this about, making Osmond believe that she has secretly defied him.
Meanwhile, Ralph has taken a turn for the worse. He visits in Rome for a while, and Osmond is displeased that Isabel spends a lot of time with him. Ralph then returns to his home in Gardencourt, where he plans to take his final resting place. Isabel's friends come to Rome to observe whether or not she is really happy in this marriage of which they all disapproved.
Isabel begins to suspect, from Madame Merle's overzealous interest in Pansy's marriage, that Madame Merle has meddled in her affairs. She then learns from Osmond's sister that Madame Merle is in fact Pansy's mother, and that Osmond and Madame Merle once had an extramarital affair with each other. Isabel is shocked and horrified to realize that Merle has actually manipulated her into marrying Osmond, and that Osmond has married her for her husband.
Isabel's discovery of this fact makes her question whether or not she really was capable of making a free choice all on her own. She realizes that her own life is too mixed up in the affairs of others - in order to be free, she must acknowledge the way her life is entangled in social relations with other people.
Isabel openly defies her husband when she returns to Gardencourt to say goodbye to Ralph on his deathbed. Osmond has meanwhile sent his daughter Pansy to a convent, so as to make her forget her love for Edward Rosier. Isabel promises Pansy that she will return. Isabel learns from Madame Merle that Ralph was the one who made her a rich woman.
Upon his deathbed, Ralph confesses to having ruined Isabel by giving her so much money and making her a target for fortune hunters. Isabel and Ralph though share an intimate moment and stress the importance of one another for each other's lives.
The novel concludes with Caspar Goodwood's arrival at Gardencourt, and his suggestion to Isabel that they begin a love affair, since Isabel is so unhappy in her marriage. She refuses and runs away, to return to her husband and Pansy in Rome.
This novel explores the nature of human freedom, moral choice, and conventional social relations. What does it mean to be free? How should the needs of others factor into our lives? What does it mean to be deceptive to others? It also explores the significance of the aesthetic approach to objects. Aesthetics is the philosophical exploration of beauty: what makes something beautiful? And what makes something a work of art? Henry James is considering how we might use the aesthetic approach in our relationships to other people. Is it wrong to see another person as a work of art? What can we learn from reading the story of a person as if it were a "portrait" of a lady?