Tom Ripley is a young man struggling to make a living in New York City by whatever means necessary, including a series of small-time confidence scams. One day, he is approached by shipping magnate Herbert Greenleaf to travel to "Mongibello" (based on the resort town Positano), in Italy, to persuade Greenleaf's errant son, Dickie, to return to the United States and join the family business. Ripley agrees, exaggerating his friendship with Dickie, a half-remembered acquaintance, in order to gain the elder Greenleaf's trust.
Shortly after his arrival in Italy, Ripley contrives to meet Dickie and his friend, Marge Sherwood. Dickie allows Ripley to stay with him in his Italian summer home. As the two men spend more time together, Marge feels left out. Soon after Ripley arrives, Freddie Miles, a school friend of Dickie's, visits the summer home. Ripley immediately dislikes Freddie.
Dickie, concerned about Marge's feelings, becomes more attentive to her, and allows the relationship to become romantic. Ripley is enraged, and while nursing his feelings of jealousy and betrayal dresses up in Dickie's clothing and practices his mannerisms. Dickie walks in on him and reacts with shock and confusion.
Ripley senses that Dickie has begun to tire of him, resenting his constant presence and growing personal dependence. Ripley has indeed become obsessed with Dickie, which is further reinforced by his desire to imitate and maintain the wealthy lifestyle Dickie has afforded him. As a gesture to Ripley, Dickie agrees to travel with him on a short holiday to San Remo. Sensing that he is about to cut him loose, Ripley gets the idea to murder Dickie and assume his identity. When the two set sail in a small rented boat, Ripley beats him to death with an oar, dumps his anchor-weighted body into the water and scuttles the boat.
Ripley assumes Dickie's identity, living off the latter's trust fund and carefully providing communications to Marge to assure her that Dickie has dumped her. Ripley forges checks and changes his appearance to better resemble Dickie in order to continue the lavish lifestyle he has enjoyed. Freddie encounters Ripley at what he supposes to be Dickie's apartment in Rome, and he soon suspects something is wrong. When Freddie finally confronts him, Ripley kills him with a heavy glass ashtray in the apartment. He later disposes of the body on the outskirts of Rome, attempting to make the police believe that robbers have murdered Freddie.
Ripley enters a cat-and-mouse game with the Italian police but manages to keep himself safe by restoring his own identity and moving to Venice. In succession, Marge, Herbert, and an American private detective confront Ripley, who suggests to them that Dickie was depressed and may have committed suicide. Marge stays for a while at Ripley's rented house in Venice. When she discovers Dickie's rings in Ripley's possession, she seems to be on the verge of realizing the truth. Panicked, Ripley contemplates murdering Marge, but she is saved when she says that if Dickie gave his rings to Ripley, then he probably meant to kill himself.
The story concludes with Ripley traveling to Greece and resigning himself to eventually getting caught. However, he discovers that the Greenleaf family has accepted that Dickie is dead and that they have transferred his inheritance to Ripley – in accordance with a will forged by Ripley on Dickie's typewriter. While the book ends with Ripley happily rich, it also suggests that he may forever be dogged by paranoia. In one of the final paragraphs, he nervously envisions a group of police officers waiting to arrest him, and Highsmith leaves her protagonist wondering, "...was he going to see policemen waiting for him on every pier that he ever approached?" However, Ripley quickly dismisses this and proceeds with his trip.
