In the Sandleford warren, a young runt rabbit called Fiver, who is a seer, receives a very disturbing vision of his warren's imminent destruction. He and his brother Fiver are unable to convince their chief rabbit of the urgent need to evacuate, so they decide to set out on their own with a small band of rabbits to seek out a new home, only just managing to elude the Owsla, the warren's military presence, as they do so.
The traveling rabbits find themselves following the strong leadership of Hazel who was until now a relatively unimportant member of the warren, with very little influence. They travel through dangerous territory, with former Owsla members Bigwig and Silver the physically strongest among them. They soon meet a rabbit called Cowslip, who generously invites them to join his warren; when Bigwig is almost killed in a snare, the traveling rabbits realize that the residents of Cowslip's warren are simply using them to increase their own odds of survival and they decide to continue on with their journey.
Fiver's visions promise a safe place in which to settle, and the group eventually finds Watership Down, an ideal location to set up their new warren.They soon reunite with fellow Sandford warren rabbits Holly and Bluebell, who inform them that Fiver's vision came true and that the Sandleford warren was completely destroyed by humans.
Although Watership Down is peaceful, and everyone is happy, Hazel realizes that there are no female rabbits, this condemning the warren to certain obeisance once the male rabbits living there die. With the help of a seagull called Kehaar, they discover a nearby warren in Efrafa, which is overcrowded and has many doe rabbits. Hazel sends a small contingent to Efrafa to present their request for does to join the Watership Down warren. Whilst waiting for the group to return, Hazel and Pipkin scout out nearby Nuthanger Farm, finding two pairs of hutch rabbits there. The following day Hazel leads a raid on the farm, returning to the warren with two does and a buck. The emissary returns from Efrafra lucky to be alive and tell Hazel that Efrafra is a police state led by despotic chief Feneral Woundwort. However, they did manage to identify an Efrafran doe named Hyzenthlay, who wants to leave the warren and is willing to recruit others to join the escape. Hazel and Bigwig devise a plan to rescue the would-be escapers and they join them on Watership Down ready to begin a new life in freedom.
Shortly after this, the Owsla of Efrafra, led by the General himself, arrives to attack the new warren at Watership Down, but thanks to Bigwig's bravery, and loyalty to the warren, as well as Hazel's ingenious planning, the Watership Down rabbits engineer the demise of General Woundwort by unleashing the Nuthanger Farm watchdog. Woundwort is a formidable fighter and stands his ground as the dog closes in for the kill, but his body is never recovered and at least one of his former followers continues to believe in his survival. Hazel is almost killed by a cat but is saved by the farm girl, Lucy, owner of the hutch rabbits.
The novel's epilogue reveals that Hazel, napping in his burrow one "chilly, blustery morning in March" some years later, is visited by rabbit-folk hero El-ahrairah, who invites Hazel to join his Owsla. Leaving his friends and the earthly body he no longer needs behind, Hazel leaves Watership Down with the spirit guide.
