The narrator, V., is absorbed in the composition of his first literary work, a biography of his half-brother, the Russian-born English novelist Sebastian Knight (1899–1936). In the course of his quest he tracks down Sebastian's contemporaries at Cambridge and interviews other friends and acquaintances. In the course of his work V. also surveys Sebastian's books (see below) and attempts to refute the views of the "misleading" The Tragedy of Sebastian Knight, a biography by Knight's former secretary Mr. Goodman, who maintains that Knight was too aloof and cut off from real life.
V. concludes that, after a long-running romantic relationship with Clare Bishop, Sebastian's final years were embittered by a love affair with another woman — a Russian whom he presumably met at a hotel in Blauberg, where Sebastian spent time recuperating from a heart ailment in June 1929. V. leaves for Blauberg, where, with the help of a private detective, he acquires a list of the names of four women who were staying at the hotel at the same time as Sebastian and tracks down each to interview them. After dismissing the possibility of Helene Grinstein in Berlin, his search leads him to Paris and the list narrows to two candidates: Mme de Rechnoy and Mme von Graun.
V. first suspects Mme de Rechnoy of being the mystery woman, based on a compelling description from her ex-husband, Pahl Palich Rechnoy. Mme de Rechnoy has left her husband and cannot be located, leaving V. unsatisfied. However, after meeting Mme von Graun's friend, Mme Nina Lecerf, and hearing stories of von Graun's unflattering affair with a Russian, V. becomes convinced that Helene von Graun is the woman in question. Nina invites V. to visit her in the country, where Helene von Graun will be staying with her. Finding that Helene has not yet arrived, V. mentions to Nina a letter introducing himself to Mme von Graun, which angers her. By chance, V. learns that it is Nina Lecerf herself, and not Helene, who was Sebastian's final romance. Nina was, in fact, the Mme de Rechnoy whom V. had originally suspected but never met.
The final chapters of the narration deal with The Doubtful Asphodel, Sebastian's final novel, which is centered on a dying man and his slow decay. V.'s description of the novel reveals similarities and coincidence not only with Sebastian's life, but with V.'s own investigative adventures. V. tries to account for Sebastian's final years, including a last letter from Sebastian asking V. to visit him at a hospital outside Paris. As V. makes the trip (from Marseilles, where he is temporarily stationed by his firm), his ties to his own life become increasingly visible for their tenuousness: his employer hampers his ability to travel, he struggles to remember necessary details such as the hospital name, he even lacks sufficient money to travel efficiently. V. finally arrives at the hospital and listens to his sleeping brother's breathing from a separate room, only to discover that the sleeping man is not his brother, but another man. Sebastian Knight had died the night before.
The novel concludes with a philosophical reconciliation of Sebastian's life and a final implication that V. himself is Sebastian Knight, or at least his incarnation.
