In 1835, the wealthy and respected Buddenbrooks, a family of grain merchants, invite their friends and relatives to dinner in their new home in Lübeck. The family consists of patriarch Johann Jr. and his wife Antoinette; their son Johann III ("Jean") and his wife Elizabeth, and the latter's three school-age children, sons Thomas and Christian, and daughter Antonie ("Tony"). They have several servants, most notably Ida Jungmann, whose job is to care for the children. During the evening, a letter arrives from Gotthold, estranged son of the elder Johann and half-brother of the younger. The elder Johann disapproves of Gotthold's life choices, and ignores the letter. Johann III and Elizabeth later have another daughter, Klara.
As the older children grow up, their personalities begin to show. Diligent and industrious Thomas seems likely to inherit the business some day. By contrast, Christian is more interested in entertainment and leisure. Tony has grown quite conceited and spurns an advance from the son of another up-and-coming family, Herman Hagenström. Herman takes it in stride, but Tony bears a grudge against him for the rest of her life. The elder Johann and Antoinette die, and the younger Johann takes over the business, and gives Gotthold his fair share of the inheritance. The half-brothers will never be close, though, and Gotthold's three spinster daughters continue to resent Johann's side of the family, and delight in their misfortune over the coming years. Thomas goes to Amsterdam to study, while Tony goes to boarding school. After finishing school, Tony remains lifelong friends with her former teacher, Theresa "Sesame" Weichbrodt.
An obsequious businessman, Bendix Grünlich, of Hamburg, introduces himself to the family, and Tony dislikes him on sight. To avoid him, she takes a vacation in Travemünde, a Baltic resort northeast of Lübeck, where she meets Morton Schwarzkopf, a medical student in whom she is interested romantically. In the end, though, she yields to pressure from her father, and marries Grünlich, against her better judgment, in 1846. She produces a daughter, Erika. Later, though, it is revealed that Grünlich had been cooking his books to hide unpayable debt, and had married Tony solely on the hopes that Johann would bail him out. Johann refuses, and takes Tony and Erika home with him instead. Grünlich goes bankrupt, and Tony divorces him in 1850.
Christian begins traveling, going as far as Valparaíso, Chile. At the same time, Thomas comes home, and Johann puts him to work at the business. During the unrest in 1848, Johann is able to calm an angry mob with a speech. He and Elizabeth become increasingly religious in their twilight years. Johann dies in 1855, and Thomas takes over the business. Christian comes home and initially goes to work for his brother, but he has neither the interest nor the aptitude for commerce. He complains of bizarre illnesses and gains a reputation as a fool, a drunk, a womanizer, and a teller of tall tales. Thomas, coming to despise his brother, sends him away, to protect his own and his business's reputation. Later, Thomas marries Gerda Arnoldsen, a musician from Amsterdam and Tony's former schoolmate.
Klara marries Sievert Tiburtius, a pastor from Riga, but she dies of tuberculosis without producing any children. Tony marries her second husband, Alois Permaneder, a provincial but honest hops merchant from Munich. However, once he has her dowry in hand, he invests the money and retires, intending to live off his interest and dividends, while spending his days in his local bar. Tony is unhappy in Munich, where her family name impresses no one, where her favorite seafoods are unavailable at any price in the days before refrigeration, where even the dialect is noticeably different from her own. She delivers another baby, but it dies on the same day it is born, leaving her heartbroken. Tony later leaves Permaneder after she discovers him drunkenly trying to rape the maid. She and Erika return to Lübeck. Somewhat surprisingly, Permaneder writes her a letter apologizing for his behavior, agreeing not to challenge the divorce, and returning the dowry.
In the early 1860s, Thomas becomes a father and a senator. He builds an ostentatious mansion and soon regrets it, as maintaining the new house proves to be a considerable drain on his time and money. The old house, now too big for the number of people living in it, falls into disrepair. Thomas suffers many setbacks and losses in his business. His hard work keeps the business afloat, but it is clearly taking its toll on him. Thomas throws a party to celebrate the business's centennial in 1868, during which he receives news that one of his risky business deals has resulted in yet another loss.
Erika, now grown up, marries Hugo Weinschenk, a manager at a fire insurance company, and delivers a daughter, Elizabeth. Weinschenk is arrested for insurance fraud and is sent to prison. Thomas's son, Johann IV ("Hanno"), is born a weak, sickly runt and remains one as he grows. He is withdrawn, melancholic, easily upset, and frequently bullied by other children. His only friend, Kai Mölln, is a dishevelled young count, a remnant of the medieval aristocracy, who lives with his eccentric father outside Lübeck. Johann does poorly in school, but he discovers an aptitude for music, clearly inherited from his mother. This helps him bond with his uncle Christian, but Thomas is disappointed by his son.
In 1871, the elder Elizabeth dies of pneumonia. Tony, Erika, and little Elizabeth sadly move out of their old house, which is then sold, at a disappointing price, to Herman Hagenström, who is now a successful businessman himself. Christian expresses his desire to marry Aline, a woman of questionable morals with three illegitimate children, one of whom may, or may not, be Christian's. Thomas, who controls their mother's inheritance, forbids him. Thomas sends Johann to Travemünde to improve his health. Johann loves the peace and solitude of the resort, but returns home no stronger than before. Weinschenk is released from prison, a disgraced and broken man. He soon abandons his wife and daughter and leaves Germany, never to return.
Thomas, becoming increasingly depressed and exhausted by the demands of keeping up his faltering business, devotes ever more time and attention to his appearance, and begins to suspect his wife may be cheating on him. In 1874, he takes a vacation with Christian and a few of his old friends to Travemünde during the off season, where they discuss life, religion, business, and the unification of Germany. In 1875, he collapses and dies after a visit to his dentist. His complete despair and lack of confidence in his son and sole heir are obvious in his will, in which he directed that his business be liquidated. All the assets, including the mansion, are sold at distress prices, and faithful servant Ida is dismissed.
Christian gains control of his own share of his father's inheritance and then marries Aline, but his illnesses and bizarre behavior get him admitted to an insane asylum, leaving Aline free to dissipate Christian's money. Johann still hates school, and he passes his classes only by cheating. His health and constitution are still weak, and it is hinted that he might be homosexual. Except for his friend Count Kai, he is held in contempt by everyone outside his immediate family, even his pastor. In 1877, he takes ill with typhoid fever and soon dies. His mother, Gerda, returns home to Amsterdam, leaving an embittered Tony, her daughter Erika, and granddaughter Elizabeth, as the only remnants of the once proud Buddenbrook family, with only the elderly and increasingly infirm Theresa Weichbrodt to offer any friendship or moral support. Facing destitution, they cling to their wavering belief that they may be reunited with their family in the afterlife.