Emily St. Aubert is a young French noblewoman living in the 16th century. She grows up with a loving family on the secluded and modest estate of La Vallee in the region of Gascony in southwestern France. The death of Emily's mother sends Emily and her father into deep grief, and they decide to take a trip. Emily and Monsieur St. Aubert make a scenic but also perilous journey through the Pyrenees mountains, towards the Mediterranean coast. Along the way, they meet a young man named Valancourt who bonds with them and travels along with them until they reach the town of Arles. Shortly after Emily and her father part ways with Valancourt, Monsieur St. Aubert becomes very ill. Emily tries to find a place where they can rest and comes across a mysterious chateau, but learns that it is abandoned. Instead, Emily and her father take refuge in the home of a local peasant, and Monsieur St. Aubert dies a few days later. At his request, he is buried in the nearby convent of St. Clare.
Grief-stricken, Emily returns to La Vallee; Valancourt begins to woo her, but Emily's new guardian Madame Cheron (her aunt) is opposed to the match and takes Emily to her estate at Thoulouse. Two Italian noblemen, Signor Montoni and Signor Cavigni, become frequent visitors at Madame Cheron's home; she also changes her opinion on Valancourt, and he and Emily become engaged for a brief period. However, Madame Cheron and Signor Montoni abruptly get married, and decide that Emily is going to accompany them to Italy and must end her engagement. Once she is in Venice, Montoni starts trying to trap Emily into a marriage with another Italian nobleman, Count Morano. However, plans abruptly change again, and Emily and Madame Montoni (formerly Madame Cheron) are whisked off to the remote castle of Udolpho in the Apennine mountains.
Udolpho is an eerie place. Emily feels very isolated, with only her servant Annette for company. The history of the castle is tied up with a mysterious woman named Signora Laurentini; she owned the castle prior to Montoni, and Montoni tried to court her, but she was in love with someone else. One day the Signora mysteriously vanished, and Montoni then inherited the castle. Montoni's belief is that the Signora killed herself, but Emily is suspicious that Montoni might have killed her in order to obtain the castle. The ominous atmosphere is heightened due to Emily uncovering some sort of horrible object hidden under a black veil. Emily is also in more practical forms of danger: Morano tries to abduct her from the castle, Montoni is acting as a local warlord and getting involved in military skirmishes, and the relationship between Montoni and Emily's aunt is becoming more strained. Amidst a violent confrontation, Madame Montoni is imprisoned in a remote part of the castle and Emily fears her aunt has been murdered. Madame Montoni eventually dies due to her imprisonment, and leaves her property to Emily.
Emily is now unprotected in the castle, and subject to intense pressure to sign over her various French properties (her paternal estate and her inheritance from her aunt) to Montoni. Unexpectedly, a mysterious prisoner in the castle helps Emily, as well as Annette and Annette's lover, Ludovico, to escape from the castle and flee back to France. The prisoner, Du Mont, is a Frenchman from Gascony who has been in love with Emily for years. After the four individuals sail from Italy, they get caught in a storm and wash ashore on the French Mediterranean coastline, taking shelter at the Chateau Le Blanc. The chateau belongs to the Count and Countess de Villefort, as well as their children Henri and Blanche; the Count de Villefort inherited it from the Marquis de Villeroi, who had abandoned the chateau years before. It is the same chateau that Emily had passed by when her father was ill, and her father had in fact requested to be buried next to the Marchioness de Villeroi, the former mistress of the chateau.
While staying at the Chateau Le Blanc, Emily reunites with Valancourt. However, in her absence, Valancourt fell prey to a dissipated life in Paris, gambling, taking mistresses, and even going to prison for debt. Du Pont and the Count de Villefort strongly discourage Emily from marrying him, and Emily regretfully breaks off the relationship. Emily also learns more about the story of the Marchioness from the housekeeper Dorothee. The Marchioness de Villeroi was a reluctant bride because she was in love with someone else, but she was also very virtuous and kind and tried to make the best of her life at the Chateau Le Blanc. However, her marriage with the Marquis became more and more unhappy and the Marchioness eventually died under circumstances that made Dorothee believe she was poisoned. After his wife's death, the Marquis moved away from the chateau, and mysterious sounds and visions tend to come from the rooms where the Marchioness died, leading many people to think the rooms are haunted. In an effort to disprove these rumors, Ludovico offers to stay overnight in the rooms alone, but in the morning he is nowhere to be found.
A short time later, Blanche and the Count de Villefort are traveling through the Pyrenees mountains and take refuge in a remote fortress with a group of men whom they eventually discover to be Spanish bandits. Blanche and her father are in danger, but Ludovico has been held prisoner at the fortress, and he helps them to escape. Once they are out, Ludovico explains the mystery of the haunted rooms: the bandits have been storing their plunder in the abandoned rooms, and they were the ones making sounds and appearing. When they found Ludovico, they kidnapped him. Meanwhile, Emily has gone to visit the convent of St. Clare where one of the nuns, Sister Agnes, is dying and acting strangely. On her deathbed, Agnes reveals her secret history: she is actually Signora Laurentini. As a young woman in Italy, she fell in love with the Marquis de Villeroi, but he refused to marry her. When she learned he had married another woman, she snuck out of her home at Udolpho (leaving Montoni to inherit the castle) and went to France to reunite with him. The Marquis and the Signora began having an affair, and she eventually persuaded him to poison his wife. However, after the Marchioness was murdered, both the Marquis and the Signora were consumed by guilt. She entered a convent and took on a new identity as Sister Agnes, while he abandoned the Chateau.
One additional secret is revealed: the Marchioness was the sister of Monsieur St. Aubert (hence why he wanted to be buried with her) and thus Emily's aunt. To atone for her crimes, Signora Laurentini/Sister Agnes leaves all of her wealth and property to Emily. Paired with Emily's estate from her parents and her inheritance from Madame Montoni, Emily is now extremely wealthy. Around this time, a friend of Du Mont reveals that the rumors about Valancourt have been exaggerated: he gambled a bit, but he redeemed himself and was always very kind and chivalrous. Emily and Valancourt happily get married and go to live at La Vallee, while the Castle of Udolpho passes to a kindly French couple who had helped to restore Valancourt's reputation.