The novel follows Oedipa Maas, a California housewife who becomes entangled in a convoluted historical mystery, when her ex-lover dies having named her as the co-executor of his estate. The catalyst of Oedipa's adventure is a set of stamps that may have been used by a secret underground postal delivery service, the Trystero (or Tristero).
According to the narrative that Oedipa pieces together during her travels around Southern California, the Trystero was defeated by Thurn und Taxis—a real postal system—in the 18th century, but Trystero went underground and continued to exist into the present (the 1960s). Its mailboxes are disguised as regular waste bins, often displaying its slogan, W.A.S.T.E. (an acronym for "We Await Silent Tristero's Empire") and its symbol, a muted post horn. The existence and plans of this shadowy organization are revealed bit by bit, but there is always the possibility that the Trystero does not exist. Oedipa is buffeted between believing and not believing in it, without finding proof either way. The Trystero may be a conspiracy, it may be a practical joke, or it may simply be that Oedipa is hallucinating the arcane references to this underground network that she seems to be discovering on bus windows, toilet walls, and everywhere in the Bay Area.
Prominent among these references is the Trystero symbol, a muted post horn with one loop. Originally derived, supposedly, from the Thurn and Taxis coat of arms, Oedipa first finds this symbol in a bar bathroom, where it decorates a graffito advertising a group of polyamorists. It later appears among an engineer's doodles, as part of a children's sidewalk jump rope game, amidst Chinese ideograms in a shop window, and in many other places. The post horn (in either original or Trystero versions) appears on the cover art of many TCL49 editions and in artwork created by the novel's fans.
Oedipa finds herself drawn into the intrigue when an old boyfriend, the California real estate mogul Pierce Inverarity, dies. Inverarity's will names her as his executor. Soon, she learns that although Inverarity "once lost two million dollars in his spare time [he] still had assets numerous and tangled enough to make the job of sorting it all out more than honorary." She leaves her comfortable home in Kinneret-Among-The-Pines, a northern California village, and travels south to the fictional town of San Narciso (Spanish for "Saint Narcissus"), near Los Angeles. Exploring puzzling coincidences that she uncovers while parsing Inverarity's testament, Oedipa finds what might be evidence for the Trystero's existence. Sinking or ascending ever more deeply into paranoia, she finds herself torn between believing in the Trystero and believing that it is a hoax established by Inverarity. Near the novel's conclusion, she reflects:
He might have written the testament only to harass a one-time mistress, so cynically sure of being wiped out he could throw away all hope of anything more. Bitterness could have run that deep in him. She just didn't know. He might himself have discovered The Tristero, and encrypted that in the will, buying into just enough to be sure she'd find it. Or he might even have tried to survive death, as a paranoia; as a pure conspiracy against someone he loved.
Along the way, Oedipa meets a wide range of eccentric characters. Her therapist in Kinneret, Dr. Hilarius, turns out to have done his internship in Buchenwald, working to induce insanity in captive Jews. "Liberal SS circles felt it would be more humane," he explains. In San Francisco, she meets a man who claims membership in the Inamorati Anonymous (IA), a group founded to help people avoid falling in love, "the worst addiction of all". In Berkeley, she meets John Nefastis, an engineer who believes he has built a working version of Maxwell's demon, a means for defeating entropy. The book ends with Oedipa's attending an auction, waiting for bidding to begin on a set of rare postage stamps that she believes representatives of Trystero are trying to acquire. (Auction items are called "lots"; a lot is "cried" when the auctioneer is taking bids on it; the stamps are "Lot 49".)