Book 1: Beginnings
The story begins in the age of the ruler Bharata. During his time, the world is full of people following dharma. This is also a time when the demons have been defeated by the gods and left powerless in the cosmos, so they begin inhabiting Earth in the form of various animals. To counteract their evil influence, the gods begin to inhabit the Earth too, taking the form of humans. Much of "Beginnings" is dedicated to discussing the lineage descending from Bharata and outlining the various types of curses suffered by people on Earth.
But the most important part of the lineage is the two brothers born of Bharata's descendent Vyasa. One is Dhrtarastra, who would become king were he not born blind, and the other is the younger Pandu, who indeed does become king. Dhrtarastra is born 100 sons by his wife Gandhari who gives birth to a large, fleshy embryo that splits into 100 pieces, and Pandu is born five sons by a variety of women, each the incarnate of a god: Arjuna, Bhima, Yudhisthira, Nakula, and Sahadeva. A sixth brother, Karna, is born in secret and raised by a Suta despite, like his brothers, being born into the Ksatriya caste.
Dhrtarastra's sons are all demons, led by the most wicked one Duryodhana, who spurns dharma, and tries many times to kill Pandu's son Bhima and, later, set Pandu's sons' house on fire to kill all five of them at once. Bhima saves his brothers and mother from the fire, and this marks a shift from playful fighting between the cousins to a more acrimonious, warlike relationship. Arjuna begins gaining power and influence around the land during a variety of sexual escapades. The five brothers marry the princess Draupadi. Dhrtarastra awards kingdoms to both Duyodhana and Yudhisthira.
Book 2: The Hall
Yudhisthira is urged by his friends and the god Krsna to undergo a consecration ritual to elevate him from the rank of king to that of emperor. Yudhisthira rebuffs the idea that this is his dharma, but is convinced by Krsna to defeat Jarasamdha, a king who has imprisoned 84 other kings and wishes to imprison another 16 in order to sacrifice them all an increase his power. Yudhisthira, Bhima, and Ajuna sneak into Jarasamdha's house in disguise and challenge him to a battle, wherein Bhima kills Jarasamdha with a spear. The sound of Bhima's war cry and Jarasamdha's dying wails is so strong that it causes all of the women in the area to miscarry. Yudhisthira becomes renowned for protecting the kingdom.
As he strictly follows his dharma as king, Yudhisthira reigns over a peaceful and prosperous kingdom. He decides to follow Krsna's advice and undergo the consecration sacrifice, so he gathers all of the kings from around the land and houses them in advance of the ritual. During the ritual, the king Sisupala objects to the ritual on the grounds that Yudhisthira violates his own dharma and shows no respect to the other kings, but Sisupala's objections are ultimately dismissed and Krsna completes Yudhisthira's consecration as emperor.
While leaving the consecration ceremony, Duryodhana makes a fool of himself by diving into a pool that's too shallow and hitting his head on a doorway. This puts him in a terrible mood that results in profound jealously of all Yudhisthira has achieved. While consulting with a trusted advisor Sakuni, Duryodhana devises a plan to ruin Yudhisthira not through war, but through gambling. Yudhisthira cannot resist the urge to gamble, but is terrible at it, and gambles away his wealth, his kingdom, his brothers' freedom, his own freedom, and Draupadi's freedom.
Draupadi objects to becoming Duryodhana's slave, so she appeals to Dhrtarastra, who frees her and grants her boons to free Yudhisthira and Bhima. Duryodhana is infuriated that his work has been undone, so he challenges Yudhisthira once again, this time wagering that the loser and his family must be exiled for 12 years, and live in disguise for a 13th year, with the penalty of returning to exile for another 12 years if he is recognized while incognito. Yudhisthira loses and he and his brothers are exiled.
Book 3: The Forest
The brothers live in exile while brahmins and kings find them to pay tribute. Yudhisthira complains to one of the Brahmins that he has to suffer in exile while his enemies, who are wicked people, thrive. Lomasa showers Yudhisthira with tales of fellow kings and various myths of strange births. Exile is also a time when the brothers get in a variety of conflicts and misadventures, with Bhima often missing. Arjuna spends some time in the heavens training with Indra, learning how to use the celestial weapons. Draupadi is briefly kidnapped and won back.
During this storytelling period, Yudhisthira is told of Savitri, a woman who so closely abided by her own dharma that she was able to convince the god Yama to give her father-in-law his kingdom and eyesight back, and to bring her husband Satyavat back from the dead. The time in the forest concludes with Indra visiting Karna as a beggar Brahmin, asking for Karna's armor and earrings. Karna obliges him, and in return, Indria gives Karna a spear like the one that Bhima had in the first book, that will be guaranteed to kill an enemy of Karna's choosing in battle.
The early books of the Mahabharata sweep through a massive story spanning both generations of a royal family and a wide swath of humanity. The first book of the story, "Beginnings," introduces an epic tale that is as much worldly as it is cosmic. Similar to other foundational epics in human literature from other cultures—the Iliad for the Greeks, the Old Testament for the Jews—the Mahabharata starts out on matters concerning the gods, and those matters come to concern humans and the earth insofar as the interests of those higher beings spill over into this material realm.
Also similarly to those other epics, the Mahabharata unfolds as a series of narrated stories and parables. Such framing devices exist for two reasons. First, it anchors the story firmly within the cosmic realm, as one of the recurring themes of the epic that emerges is that all events are fated, prescribed by powerful gods. And much as a god, according to this epic, knows exactly the course of events that is destined, so too does a storyteller know the end of a story when he begins to tell it. The very philosophy of fate in Hinduism is determined by this structure.
The second reason for the framing device is a historical one. The Mahabharata was written down at a time when the oral narrative traditional was dominant, and its structure as a series of stories recited from one person to another reflects that spoken tradition. Hence, the role of the storyteller is always important on a narrative level; without that narrator, there would be no narrative. Hence, we have the character of Vyasa, who is said to be the descendent of Bharata who has the two sons—Dhrtarastra and Pandu—whose own sons will embark on the war that is the locus of the Mahabharata. Vyasa is widely understood to be the scribe of the Mahabharata, and is considered one of the seven immortal beings in the Hindu faith. The link between the divine and the storyteller, here, is an explicit and crucial one.
The early books introduce the key theme of dharma that will run throughout the epic, but frequently does so by means of counterpoint. For example, we get parables of characters committing adharma (or violations of dharma committed out of greed), as well as the Pandava's suffering that comes from Yudhisthira following dharma and losing his entire kingdom in a dice game. How the exile is crucial to Yudhisthira's dharma, and how Duryodhana pursues devious methods of stealing Yudhisthira's kingdom, will not just drive the story of the Mahabharata, but provide entry to its greatest ethical questions and lessons.