Henry Lee, the son of Chinese parents in Seattle, Washington, is the only Asian child at his elementary school. His father makes him wear an "I Am Chinese" button so he will not be mistaken for a Japanese boy in the heightened racist climate of World War II Seattle. But Henry is nevertheless bullied by his white classmates and must work long hours in the cafeteria dishing out meals and cleaning up to fulfill the terms of his scholarship. One day a Japanese-American girl named Keiko Okabe joins him, also on scholarship. Henry and Keiko bond. When the residents of the city's Japantown are threatened with evacuation to internment camps, Henry safeguards Keiko's family's photo albums. He then travels with the lunch lady to serve meals at Camp Harmony, a temporary internment facility on the Western Washington Fairgrounds in Puyallup, Washington, where he sees her. With his friend, a local jazz musician named Sheldon, he also visits her in the Minidoka internment camp in Idaho. Visiting her there, he promises to wait for her until the war ends. They decide to write each other letters, and Henry returns to Seattle.
Henry's father is intent on sending him to China to complete his education in a traditional manner. Henry arrives home one day to find a new suit and a steamer ticket to China in his name. He agrees to go on the condition that his father (as part of an association of elders) saves the Panama Hotel from being sold. The Panama Hotel is where Keiko's family stored the greater part of their belongings when they were shipped to the internment camps. Many other families also stored their possessions in the basement of the Panama Hotel.
Though Henry writes many letters to Keiko, he receives very few in return. The mail clerk, a young girl around Henry's age, sympathizes with him, and when Keiko does not appear at the Panama Hotel for the last meeting Henry had tried to arrange with her on what turns out to be V-J Day, the mail clerk brings him his returned envelope with a bunch of star lilies. Henry turns his attention to the girl, named Ethel Chen, and eventually marries her. On his deathbed, Henry's father insinuates that he had something to do with stopping the correspondence between Henry and Keiko. Henry and Ethel celebrate their 30th wedding anniversary, after which Ethel falls ill with cancer for seven years and Henry devotedly cares for her in their home. Though he thinks often of Keiko, Henry never lets his wife know and is a caring and devoted husband till the end. Henry also supports his son Marty at college, and welcomes Marty's girlfriend, a non-Chinese girl named Samantha, into their family. The novel concludes with Henry's son Marty locating Keiko in New York City, and Henry goes to see her.
