Dickens divided the book into five chapters, which he labelled "staves".
The story begins on a cold and bleak Christmas Eve in London, seven years after the death of Ebenezer Scrooge's business partner, Jacob Marley. Scrooge, an old miser, hates Christmas and refuses an invitation to Christmas dinner from his nephew Fred. He turns away two men who seek a donation from him in order to provide food and heating for the poor, and only grudgingly allows his overworked, underpaid clerk, Bob Cratchit, Christmas Day off with pay to conform to the social custom.
At home that night, Scrooge is visited by Marley's ghost, who wanders the Earth, entwined by heavy chains and money boxes, forged during a lifetime of greed and selfishness. Marley tells Scrooge that he has one chance to avoid the same fate: he will be visited by three spirits and he must listen to them or be cursed to carry chains of his own, much longer than Marley's chains.
The first of the spirits, the Ghost of Christmas Past, takes Scrooge to Christmas scenes of Scrooge's boyhood and youth, reminding him of a time when he was more innocent. The boyhood scenes portray Scrooge's lonely childhood, his relationship with his beloved sister Fan, and a Christmas party hosted by his first employer, Mr. Fezziwig, who treated Scrooge like a son. They also portray Scrooge's neglected fiancée Belle, who ends their relationship after she realises that Scrooge will never love her as much as he loves money. Finally, they visit a now-married Belle with her large, happy family on a recent Christmas Eve.
The second spirit, the Ghost of Christmas Present, takes Scrooge to a joy-filled market of people buying the makings of Christmas dinner and celebrations of Christmas in a miner's cottage and in a lighthouse. Scrooge and the ghost also visit Fred's Christmas party. A major part of this stave is taken up with Bob Cratchit's family feast and introduces his youngest son, Tiny Tim, a happy boy who is seriously ill. The spirit informs Scrooge that Tiny Tim will die soon unless the course of events changes. Before disappearing, the spirit shows Scrooge two hideous, emaciated children named Ignorance and Want. He tells Scrooge to beware the former above all and mocks Scrooge's concern for their welfare.
The third spirit, the Ghost of Christmas Yet to Come, shows Scrooge a Christmas Day in the future. The ghost shows him scenes involving the death of a disliked man. The man's funeral will only be attended by local businessmen if lunch is provided. His charwoman, his laundress, and the local undertaker steal some of his possessions and sell them to a fence. When Scrooge asks the ghost to show anyone who feels any emotion over the man's death, the ghost can only show him the pleasure of a poor couple in debt to the man, rejoicing that his death gives them more time to put their finances in order. After Scrooge asks to see some tenderness connected with any death, the ghost shows him Bob Cratchit and his family mourning the passing of Tiny Tim. The ghost then shows Scrooge the man's neglected grave, whose tombstone bears Scrooge's name. Sobbing, Scrooge pledges to the ghost that he will change his ways to avoid this outcome.
Scrooge awakens on Christmas morning a changed man. He spends the day with Fred's family and anonymously sends a large turkey to the Cratchit home for Christmas dinner. The following day he gives Cratchit an increase in pay and becomes like another father to Tiny Tim. From then on Scrooge begins to treat everyone with kindness, generosity and compassion, embodying the spirit of Christmas.