Rodion Romanovich Raskolnikov, a former law student, lives in extreme poverty in a tiny, rented room in Saint Petersburg. He has abandoned all attempts to support himself and has devised a plan to murder and rob an elderly pawn-broker, Alyona Ivanovna. While still considering the plan, Raskolnikov makes the acquaintance of Semyon Zakharovich Marmeladov, a drunkard who recently squandered his family's little wealth. Marmeladov tells him about his teenage daughter, Sonya, who has chosen to become a prostitute in order to support the family. Raskolnikov also receives a letter from his mother in which she speaks of their coming visit to Saint Petersburg, and describes at length the problems of his sister Dunya, who has been working as a governess, with her ill-intentioned employer. To escape her vulnerable position, and with hopes of helping her brother, Dunya has chosen to marry a wealthy suitor. Raskolnikov is inwardly enraged at her sacrifice, feeling it is the same as what Sonya felt compelled to do.
After much deliberation, Raskolnikov sneaks into Alyona Ivanovna's apartment, where he murders her with an axe. He also kills her half-sister, Lizaveta, who happens to stumble upon the scene of the crime. Shaken by his actions, Raskolnikov manages to steal only a handful of items and a small purse, leaving much of the pawn-broker's wealth untouched. Raskolnikov then flees and, due to a series of coincidences, manages to leave unseen and undetected.
After the bungled murder, Raskolnikov falls into a feverish state and begins to worry obsessively over the murder. He hides the stolen items and purse under a rock, and tries desperately to clean his clothing of any blood or evidence. He falls into a fever later that day, though not before calling briefly on his old friend Razumikhin. As the fever comes and goes in the following days, Raskolnikov behaves as though he wishes to betray himself. He shows strange reactions to whoever mentions the murder of the pawn-broker, which is now known about and talked of in the city. In his delirium, Raskolnikov wanders Saint Petersburg, drawing more and more attention to himself and his relation to the crime. In one of his walks through the city, he sees Marmeladov, who has been struck mortally by a carriage in the streets. Raskolnikov rushes to help and succeeds in conveying the stricken man back to his family's apartment. Calling out for Sonya to forgive him, Marmeladov dies in his daughter's arms. Raskolnikov gives his last twenty roubles (from money that had been sent him by his mother) to Marmeladov's consumptive wife, Katerina Ivanovna, saying it is the repayment of a debt to his friend.
In the meantime, Raskolnikov's mother, Pulkheria Alexandrovna, and his sister, Avdotya Romanovna (Dunya), have arrived in the city. Dunya had been working as a governess for the Svidrigaïlov family until this point, but was forced out of the position by the head of the family, Arkady Ivanovich Svidrigaïlov. Svidrigaïlov, a married man, was attracted to Dunya's physical beauty and her feminine qualities, and offered her riches and elopement. Mortified, Dunya fled the Svidrigaïlov family and lost her source of income, only to meet Pyotr Petrovich Luzhin, a man of modest income and rank. Luzhin proposes to marry Dunya, thereby securing her and her mother's financial safety, provided she accept him quickly and without question. It is for these very reasons that the two of them come to Saint Petersburg, both to meet Luzhin there and to obtain Raskolnikov's approval. Luzhin, however, calls on Raskolnikov while he is in a delirious state and presents himself as a foolish, self-righteous and presumptuous man. Raskolnikov dismisses him immediately as a potential husband for his sister, and realizes that she only accepted him to help her family.
As the novel progresses, Raskolnikov is introduced to the detective Porfiry, who begins to suspect him of the murder purely on psychological grounds. At the same time, a chaste relationship develops between Raskolnikov and Sonya. Sonya, though a prostitute, is full of Christian virtue and is only driven into the profession by her family's poverty. Meanwhile, Razumikhin and Raskolnikov manage to keep Dunya from continuing her relationship with Luzhin, whose true character is exposed to be conniving and base. At this point, Svidrigaïlov appears on the scene, having come from the province to Petersburg, almost solely to seek out Dunya. He reveals that his wife, Marfa Petrovna, is dead, and that he is willing to pay Dunya a vast sum of money in exchange for nothing. She, upon hearing the news, refuses flat out, suspecting him of treachery.
As Raskolnikov and Porfiry continue to meet, Raskolnikov's motives for the crime become exposed. Porfiry becomes increasingly certain of the man's guilt, but has no concrete evidence or witnesses with which to back up this suspicion. Furthermore, another man admits to committing the crime under questioning and arrest. However, Raskolnikov's nerves continue to wear thinner, and he is constantly struggling with the idea of confessing, though he knows that he can never be truly convicted. He turns to Sonya for support and confesses his crime to her. By coincidence, Svidrigaïlov has taken up residence in a room next to Sonya's and overhears the entire confession. When the two men meet face to face, Svidrigaïlov acknowledges this fact, and suggests that he may use it against him, should he need to. Svidrigaïlov also speaks of his own past, and Raskolnikov grows to suspect that the rumors about his having committed several murders are true. In a later conversation with Dunya, Svidrigaïlov denies that he had a hand in the death of his wife.
Raskolnikov is at this point completely torn; he is urged by Sonya to confess, and Svidrigaïlov's testimony could potentially convict him. Furthermore, Porfiry confronts Raskolnikov with his suspicions and assures him that confession would substantially lighten his sentence. Meanwhile, Svidrigaïlov attempts to seduce Dunya, but when he realizes that she will never love him, he lets her go. He then spends a night in confusion and in the morning shoots himself. This same morning, Raskolnikov goes again to Sonya, who again urges him to confess and to clear his conscience. He makes his way to the police station, where he is met by the news of Svidrigaïlov's suicide. He hesitates a moment, thinking again that he might get away with a perfect crime, but is persuaded by Sonya to confess.
The epilogue tells of how Raskolnikov is sentenced to eight years of penal servitude in Siberia, where Sonya follows him. Dunya and Razumikhin marry and are left in a happy position by the end of the novel, while Pulkheria, Raskolnikov's mother, falls ill and dies, unable to cope with her son's situation. Raskolnikov himself struggles in Siberia. It is only after some time in prison that his redemption and moral regeneration begin under Sonya's loving influence.