The novel begins in November 1819 with a lengthy and detailed description of the Parisian boardinghouse run by a widow named Madame Vauquer. Seven boarders live in the boardinghouse: Madame Couture, her ward Victorine Taillefer, Monsieur Vautrin, a young student named Eugene de Rastignac, Mr. Poiret, Miss Michonneau, and an elderly man named Goriot.
Goriot has been living in the boardinghouse for 4 years, having moved in as wealthy man after retiring from running a business as a vermicelli manufacturer. However, as time has passed, he seems to have become increasingly impoverished. Now, as someone without money, he is a target for mockery from the other boarders. Goriot is also a subject of interest because the other boarders have observed him being visited by two young and attractive women. At first, people believe these women are his mistresses, but it is later confirmed that they are his two daughters.
Goriot is not the only boarder whose fortunes have declined: Victorine is the daughter of a wealthy man, but after her mother's death, her father disowned her and cut her off financially. Now she lives in poverty with Madame Couture, hoping to one day win back her father's heart.
Rastignac comes from a family of modest means, and the expense of his legal education is a major financial burden. Nonetheless, during his time in Paris, he has become obsessed with the wealthy and fashionable world around him. After asking his aunt to draw on any possible family connections, Rastignac is introduced to Madame la Vicomtesse de Beauseant.
Rastignac attends a ball at her fashionable home, where he is struck by the beauty of a woman named Comtesse Anastasie de Restaud. He arranges an invitation to meet Anastasie again in the future, and returns to the boarding house late at night, exhausted but happy. Since he is up late at night, Rastignac observes Goriot reshaping some expensive silver objects into simple silver bars and wonders what the old man could be doing.
The next morning, the two household servants, Sylvie and Christophe gossip about the boarders. They comment on occasionally being questioned about a man resembling Vautrin, but never confirming his identity. They also mention having seen Goriot slipping out early on a mysterious errand. Vautrin comes in a short time later, and confirms that he has seen Goriot selling silver and then using the profits to pay off a moneylender. When Goriot comes home, he sends Christophe on an errand to the house of Anastasie de Restaud, presumably with a note confirming he has paid her debt.
Rastignac joins the boarders at breakfast, and praises the beauty of the woman he met at the ball. He then comments with surprise on having seen Anastasie that very morning in the neighborhood. Vautrin shrewdly puts together the different occurrences, and suggests that Anastasie must have been going to the moneylender. Goriot has a strong reaction to the mention of her name, and Rastignac wonders if Anastasie could possibly be his mistress.
The opening of the novel creates interest by portraying a cast of seemingly ordinary characters, and then introducing mysterious elements about them. Madame Vauquer's boardinghouse is not a luxurious place, and the people who live there only have modest means. In contrast with the characters who had historically tended to be the focus of literary texts, they are not royalty or aristocrats, but they are also not idealized farmers and shepherds. Rather, the boardinghouse and its residents represent a gritty urban reality where trying to eke out a way to survive within a capitalist framework of earning and spending was a major preoccupation.
Although she houses and feed her residents, Madame Vauquer is far from being a nurturing presence, and is a shrewd and occasionally cold businesswoman. The immediate introduction of a female character preoccupied with money foreshadows the later introduction of Goriot's daughters and their relentless greed. Nonetheless, the Vauquer household does function as a kind of haphazard family where residents cannot help getting implicated in each other's private lives.
The theme of shifting fortunes and social position creates an atmosphere of instability, but where hope and ambition seems to be viable possibilities. Although they approach it in very different ways, Victorine and Rastignac both nurse hopes of changing their social positions. Victorine is a virtuous but neglected child (functioning as a foil to Goriot, a loving but neglected parent) who is driven by the hope of reconciliation with her father. She seems to long for the emotional connection this would bring more than she cares about becoming wealthy, which marks her out as a figure of innocence and piety. Rastignac is benefitting from the sacrifices his family has made in order to give him a good education, but he becomes seduced by the allure of what it would mean to be a member of the Parisian elite.
This deeper desire for luxury and influence seems to motivate Rastignac's reaction to Anastasie as much as her beauty does. He barely knows her, but his desire to pursue her functions as a sublimation of his desire to eventually be accepted into Parisian society. Although he is still quite innocent and unworldly at this point, Rastignac is shrewd enough to understand how social connections can help him, and he capitalizes on one of the few resources his family can offer him. As would be the case for many old, formerly elite families in the post-Revolutionary era, Rastignac's family no longer has much wealth but it does have a recognizable name and a few key contacts. By getting himself introduced to Madame de Beauseant and attending her ball, Rastignac takes his first few steps towards carving out a social niche for himself.
While Rastignac and Victorine aspire to rise, Goriot seems to have patiently resigned himself to seeing his fortunes decline with age. During his time at the boardinghouse, he has enacted social mobility in reverse, and his project of pawning his last few valuable items shows that he is still falling further. Nonetheless, Goriot does not seem to be upset or agitated about his declining standard of living.