In the summer of 1922, Nick Carraway, a Yale graduate from the Midwest and veteran of the Great War —who serves as the novel's narrator—takes a job in New York as a bond salesman. He rents a small house on Long Island, in the fictional village of West Egg, next door to the lavish mansion of Jay Gatsby, a mysterious multi-millionaire who holds extravagant parties but does not participate in them. Nick drives around the bay to East Egg for dinner at the home of his beautiful cousin, Daisy Fay Buchanan, and her husband, Tom, a college acquaintance of Nick's. They introduce Nick to Jordan Baker, an attractive, cynical young golfer. She reveals to Nick that Tom has a mistress, Myrtle Wilson, who lives in the "valley of ashes," an industrial dumping ground between West Egg and New York City. Not long after this revelation, Nick travels to New York City with Tom to a garage owned by Myrtle's husband George Wilson, before heading to an apartment that Tom uses like a hotel room for Myrtle, as well as other women with whom he also sleeps. At Tom's New York apartment, a vulgar and bizarre party takes place. It ends with Tom physically abusing Myrtle, breaking her nose in the process, after she says Daisy's name several times, which makes him angry.
Nick eventually receives an invitation to one of Gatsby's parties. Nick encounters Jordan Baker at the party and they meet Gatsby himself, an aloof and surprisingly young man who recognizes Nick because they were in the same division in the Great War. Through Jordan, Nick later learns that Gatsby knew Daisy through a purely chance meeting in 1917 when Daisy and her friends were doing volunteer service work with young officers headed to Europe. From their brief meetings and casual encounters at that time, Gatsby became (and still is) deeply in love with Daisy. Gatsby had hoped that his wild parties would attract an unsuspecting Daisy, who lived across the bay, to appear at his doorstep and allow him to present himself as a man of wealth and position.
Having developed a budding friendship with Nick, Gatsby uses him to arrange a reunion between himself and Daisy. Nick invites Daisy to have tea at his house without telling her that Gatsby will also be there. After an initially awkward reunion, Gatsby takes Nick and Daisy to his large mansion in an attempt to show Daisy his wealth and sophistication. Daisy, Nick and Gatsby spend the day enjoying all the activities Gatsby can provide and Nick realizes Daisy is still in love with Gatsby. Soon, the two begin an affair. At a luncheon at the Buchanan estate, Daisy speaks to Gatsby with such undisguised intimacy that Tom realizes their affair. Though Tom is himself an adulterer, he is outraged by his wife's infidelity. The group decides to drive to the Plaza Hotel, where Tom confronts Gatsby in his suite, asserting that he and Daisy have a history that Gatsby could never understand. In addition to that, he announces to his wife that Gatsby is a criminal whose fortune comes from bootlegging alcohol and other illegal activities. Daisy decides to stay with Tom, and Tom contemptuously sends her back to East Egg with Gatsby, attempting to prove that Gatsby cannot hurt him.
On the way back, Gatsby's car strikes and kills Tom's mistress, Myrtle. Nick later learns that Daisy, not Gatsby himself, was driving the car at the time of the accident. George falsely concludes that the driver of the yellow car is the secret lover he suspects his wife had. George learns from Tom that the yellow car is Jay Gatsby's. He fatally shoots Gatsby at his pool, and then turns the gun on himself. Nick organizes a funeral for Gatsby, but only one of Gatsby's party-goers and his estranged father, Henry Gatz, attend. None of Gatsby's business associates come nor does Daisy. Nick runs into Tom in New York and learns it was Tom who told George the yellow car belonged to Gatsby, and gave him Gatsby's address. Disillusioned with the East, Nick moves back to the Midwest, having decided not to tell Tom that it was Daisy behind the wheel of the car that killed Myrtle.