The story takes place from 1922 to 1925, in post-revolutionary Russia. Kira Argounova, the protagonist of the story, is the younger daughter of a bourgeois family. An independent spirit with a will to match, she rejects any attempt by her family or the nascent Soviet state to cast her into a mold. At the beginning of the story, Kira returns to Petrograd with her family, after a prolonged exile due to the assault of the Bolshevik revolutionaries. Kira's father had been the owner of a textile factory, which was seized and nationalized. Having given up all hopes of regaining their past possessions after the victories of the Red Army, the family returns to the city in search of livelihood. They find that their home has also been seized and converted to living quarters for several families.
Kira's family eventually manages to find living quarters, and Kira's father gets a license to open a textile shop, an establishment that is but a shadow of his old firm. Life is excruciatingly difficult in these times. Rand portrays long queues, weary citizens and low standards of living. With some effort, Kira manages to obtain her Labor Book, which permits her to study and work. Kira also manages to enroll in the Technological Institute, where she aspires to fulfill her dream of becoming an engineer. At the Institute, Kira meets Andrei Taganov, a co-student, an idealistic Communist and an officer in the Soviet secret police. The two share a mutual respect and admiration for each other in spite of their differing political beliefs, and become friends.
In a chance encounter, Kira meets Leo Kovalensky, an attractive man with a free spirit. It is love at first sight for Kira, and she throws herself at Leo, who initially takes her to be a prostitute. He is also strongly attracted to her and promises to meet her again. Kira and Leo are shown to be united by their desperate lives and their beliefs that run counter to what is being thrust on them by the state. After a couple of meetings, when they share their deep contempt for the state of their lives, the two plan to escape the country together.
From this point on, the novel slowly cascades into a series of catastrophes for Kira and Leo. They are caught while attempting to flee the country, but escape imprisonment with the help of an official who knew Leo's father before the revolution. Kira leaves her parents' apartment and moves into Leo's. Soon the state decides to expel any college students of a bourgeois background, and Kira is also fired from her job. The relationship between Kira and Leo, intense and passionate in the beginning, begins to deteriorate under the weight of their hardships and their different reactions. Kira keeps her ideas and aspirations alive, but decides to go along with the system until she feels powerful enough to challenge it. Leo, in contrast, sinks slowly into indifference and depression. He contracts tuberculosis and is prescribed treatment in a sanatorium. Kira's efforts to finance his treatment fail, and her appeals to the authorities to get state help fall on deaf ears.
As Kira's relationship with Leo evolves, so does her relationship with Andrei. Despite their political differences, she finds Andrei to be the one person with whom she could discuss her most intimate thoughts and views. Andrei's affection and respect for Kira slowly turns into love. When he confesses his love to Kira, she is dismayed but also desperate, so she feigns love for Andrei and agrees to become his mistress. She uses money from Andrei to fund Leo's treatment.
Leo returns cured of tuberculosis and healthy, but a changed man. He opens a food store that is a facade for black market trade. Andrei, who is concerned that corruption is damaging the communist state, starts investigating Leo's store. He arrests Leo and in the process discovers that Kira has secretly been living with Leo. Disillusioned about both his personal relationship and his political ideals, Andrei secures Leo's release and shortly thereafter commits suicide. Kira, perhaps the only genuine mourner at his state funeral, wonders if she has killed him. Having lost any moral sense that he may have left, Leo leaves Kira to begin a new life as a gigolo. After Leo's departure, Kira makes a final attempt to cross the border. Almost in sight of freedom, she is shot by a border guard and dies.