The story follows Silas Lapham, a materialistic businessman who obtained his wealth suddenly through the success of his paint business, based on a paint mine that he stumbled upon by accident. Moving from rural Vermont to Boston, a bustling port, Silas and his family must attempt to spend their newfound money in a way that conforms to society’s fashionable expectations.
The novel begins with Silas as the recipient of an interview with Bartley Hubbard, a popular yet morally dubious journalist. This interview serves as an introduction to and comment on Silas’ naïve but well-meaning attitude, as well as his boasting about the new money he has acquired from the paint business. The novel then continues with an introduction to Silas' background and family life, which sets up a parallel plot line regarding Lapham's private life that contrasts with the politics of his failing business. Silas has two daughters: the elder Penelope, who is level-headed and intelligent, and the younger Irene, who is emotionally frivolous yet domestically practical. Silas and his wife Persis fell into new wealth after discovering a paint mine on their New England farm, after which they moved to Boston. Despite now having money, the Laphams know neither proper Boston social etiquette, nor what to buy or how to act.
The reader witnesses Silas interacting with Persis, encouraging her to support his idea of building a new, more extravagant house on Beacon Street, where all of the wealthy people in Boston tend to build. Eventually, they revolve to build on the Beacon Street lot, and they hire an architect. It is evident from the beginning that the architect can manipulate Silas into spending ridiculous amounts of money if he only gets Silas to agree with all of his suggestions under the pretense of an aesthetic education. As the house begins to be built, Silas and Persis go to visit the site several times. Early on, they encounter Mr. Rogers, his ex-partner in business, there. Silas had earlier used Rogers’ money to start up his paint business, but he promptly dropped him when it became clear that Rogers did not have passion or belief in the paint. Here and throughout the novel, Persis serves as a puritanical reminder to Silas of his wrongdoings regarding Rogers. A particularly harsh instance of this is when Persis refuses to go to the house after encountering Rogers there, since she views it as having been built off of Rogers' blood.
There is a brief exploration of Silas and Persis’ marriage, which began to fail after their son died and Silas went to war. After he came back from service at Gettysburg, however, Silas was refreshed in energy and started over with both his marriage and the paint business.
Later, Silas takes Penelope and Irene to see the plot on Beacon Street, where Tom Corey is introduced to the story as the son of a wealthy family in Boston. He seems taken with both daughters, especially the beautiful Irene. Silas displays the hard-working, middle-class attitude that remains despite his newfound wealth: he brags heavily to Tom, and in private, Silas claims he can "make a man" out of Tom if only he worked and didn’t live off his father’s money. The reader is then faced with a rare scene without Silas involved, in which Irene and Penelope are alone discussing Irene’s attraction to Tom Corey. They imitate their father and his proud exclamations of his wealth, presenting Silas in a more comical, perhaps even ridiculous, light.
The novel then switches scenes to the Corey family, who are wealthy with old money and—unlike the Laphams—know how to spend it properly in society. They discuss marriage—Tom regards love as higher than money, while his father Bromfield stresses the importance of wealthy parents. Tom introduces the idea of going to work, and while Bromfield wanted him to work in the Indian cotton trade, he decides mineral paint will do for his son. Tom’s mother, Anna, on the other hand, is not pleased with either the mineral paint trade or the people he will interact with as a part of the trade.
Tom goes for an interview with Silas, and is very enthusiastic about paint, which makes Silas instantly like him. They speak for so long that Tom returns home with Silas. Tom approaches Silas, and offers to sell paint in European countries, using his knowledge of foreign languages. Silas is delighted that Tom will be more involved with his family. Persis warns Silas that if he wishes Tom and Irene to wed, Tom Corey should not be involved in the paint business, since mixing personal and professional life can create new pain and woes. Mrs. Corey is horrified to hear that Tom is now working with Silas. In response, Bromfield acknowledges that these days, most wealthy American parents have little say in their children’s actions. Even more than the business side, however, Anna Corey is more bothered about Tom's associations with Irene, claiming that she is too dull for Anna to ever get on with her.
Tom begins work at Silas’ firm, and he enjoys the independence. He encounters Silas in his office with Zerrila Dewey, his typist, acting suspiciously. Walker, the bookkeeper, confirms to Tom that Silas has always been protective over her and is very secretive. It is not known at this point, but Zerilla is the daughter of a man who saved Silas’ life in the army, whom he feels he owes a debt to. Tom visits the Laphams again. Silas is extremely pleased that he has Tom working at his firm, as he believes it boosts his social position. Tom suggests books for Irene to read, and helps Irene play with shavings at her feet, which Irene takes for a sign of affection. She reports this to Penelope, and it is evident that her feelings towards Tom are increasingly deep. At the same time, Silas begins to think that his family is just as worthy and important as the Coreys.
Silas begins to spend a lot of time and money on the house at Beacon Street, and his wife notices and feels displeased. She thinks that Silas is focusing too much on the house and on marrying Tom into the family. Meanwhile, Silas loans some money to Rogers, his previously scorned business partner. It is clear that Tom is taken by the Lapham sisters, and he asks his father to visit Lapham in his offices. The next day, Bromfield visits Lapham, and Silas is quick to try and act apathetic at the privilege of his company. He even brags a bit and acts condescendingly towards Bromfield. Later, Silas takes ill, and stays at home from work. When Tom visits the Laphams to inquire after Silas' health, he is obliged to spend time with Irene. Persis asks Penelope if Tom ever talks to her about Irene, but Penelope cannot say that he does.
Anna Corey and her two daughters, Lily and Nanny, return to Boston in the autumn months. They decide that they need to meet the Lapham sisters to figure out who their new relative may be. Anna pays Mrs. Lapham and her daughters a visit, and she is repulsed by Persis'—and particularly Penelope's—obvious lack of social knowledge and propriety. Penelope recognizes this and says that Mrs. Corey looked at her as if she had bought her and thought she paid too much. Even so, Mrs. Corey later concedes that she will have to ask them to dinner, but she and Bromfield discuss using the dinner to dissuade Tom from pursuing a Lapham daughter. The Coreys begin to plan their large dinner party, despite Tom asking them not to. When the Laphams receive the invitation, it causes a great deal of worry as to what they will each wear, how they will act, and what they will talk about. In a memorable section of the novel, Silas consults many etiquette books on whether or not gentlemen need to wear gloves to parties. Penelope, meanwhile, believing it is a dinner to introduce Irene to the Coreys and company, refuses to go.
The Laphams arrive at the Coreys' aristocratic home. Silas is extremely nervous, and drinks and eats everything he is offered, including a great deal of wine on the table. For the first time in his life, he is drunk. The dinner party conversation is lead by Bromfield, and touches on many subjects such as poverty, art, and criticism of the Romantic novel Tears, Idle Tears. Once the women leave, Lapham become increasingly drunk, telling the others about his war stories and then about his paint. In the course of this conversation, Silas even talks about Jim Millon, a man who took a bullet for him during the Civil War (who is father to Zerilla, Silas's typist). Eventually, he constantly talks until no one else does.
The next day, Lapham gives a groveling apology to Tom for his behavior. Tom is repulsed by how pathetic Silas is but is ultimately sympathetic towards him and his naïveté. Tom visits the Laphams, and discusses Tears, Idle Tears with Penelope, a topic from the dinner party that she missed. She tells Tom that the love triangle, where the couple refuses to be together for the sake of a third party, is unrealistic and unnecessary. This is ironic, since it contradicts her actions in her own love triangle with Tom and Irene, where she goes on to act meek and tries several times to yield Tom to her sister, despite her own feelings for him. Tom then declares his love for Penelope, which shocks her. She begs him to leave, and not tell anyone what he has said.
The next day, Penelope tells Persis what has happened, and Persis is surprised that Tom loves Penelope and not Irene. Penelope is distraught and tries to figure out a way to forget Tom and save Irene’s feelings. Persis decides to confide in Silas, and she asks him to come home early one day. When she asks Silas what to do, he suggests that Penelope and Tom marry. Persis is exasperated that Silas cannot see the damage this will do to Irene and accuses him of being too concerned with family connections. The two then visit Reverend Sewell, a guest at the Coreys' dinner party, who also suggests that the pair marry. Persis tells Irene directly about Penelope’s predicament. Irene is stoic, and gives Penelope all the mementos she collected to do with Tom, including one of the wood shavings. Irene decides to go back to Vermont and eventually goes West to stay with her cousins while she processes her emotions. Tom visits Penelope again, and he is surprised when Penelope tells him—as was Irene's final request before leaving—that everyone thought he loved Irene. He urges her to accept his feelings, but she won’t allow him to touch her.
Silas finds out that the money he lent Rogers was used to buy some land with milling properties on it. The mills would have been worth a lot of money, but a road that runs past is about to be bought by the railroad, which will devalue the properties. Silas thus needs to accept the railroad's forthcoming lowball offer for the land, or otherwise find a way to sell them off beforehand to someone else. Moreover, he has lent Rogers too much money for patents and other securities, and Silas is now in debt. Meanwhile, Tom tells his parents that he loves Penelope; they are surprised, but they are willing to accept her because of her sense and intelligence.
Lapham accepts that he has to sell the mills for a low price. However, Rogers shows up and says that he has some English businessmen that will buy the mills for a higher price. Here, Lapham’s conscience kicks in: he debates at length with himself and Persis whether he can sell the mills without telling the businessmen that they are worthless. Ultimately, he decides that he must not. At the same time, Penelope discovers her father’s problems, and sits down with him one evening to sort out the logistics. Persis is excluded from this, as Silas doesn’t want her to know his problems. Still, Persis finds a list of payments that Silas regularly gives to "Wm. M." She intends to confront Silas with this information, but she ultimately forgets.
In the throes of debt, Silas debates selling the family's new house and thinks about shutting down his paint factory. Increasing market competition from another party in West Virginia with lower operating costs means that he will ultimately be defeated. Persis asks Silas about "Wm. M.," but Silas will not tell her anything. Later, Persis finds that another scrap of paper does not say "Wm. M." but rather "Mrs. M." and wonders what dealings Silas could be having with another woman. At the office, Silas tells Tom to quit the business. Tom offers him a $30,000 loan, but Silas refuses. Meanwhile, Zerrilla's mother comes in and demands rent money. Silas makes her leave, creating additional suspicion from Walker, but later on Silas gives the money to Zerrilla. She talks about how her husband, Hen, is a drunken sailor, and she mentions her difficulty in divorcing him and her money issues that are exacerbated by both her husband's and mother's drunkenness. Later, Silas visits Zerrilla’s home, and he confronts Hen and Molly, refusing to support them as long as they drink and are wasteful.
Desperately, Silas puts the house on Beacon Street up for sale. When he does get an offer, he cannot bear to sell. He visits the next day, and a fire he lit to test the chimney accidentally burns the house down. Persis worries that others will think they burned the house down for insurance money. However, it is a week after the insurance policy expires, so the Laphams will receive nothing. Silas’ competition, the West Virginia company, agrees to join with his company if he can raise enough money as an investor. Silas is unable to raise money from his friends, so he can only do this if he sells to the Englishmen at the higher price. At Rogers' urgent insistence, Silas meets with the English businessmen, who dismiss his concerns about the mill's value and seem to be exceptionally shady. Silas does not want to do business with them, and he leaves quickly. When he goes home, however, very confused regarding how he can morally proceed, he finds Rogers telling Persis that if Silas does not sell the properties, Rogers and his family will be ruined. Still, the next day, Silas refuses to sell and be a dishonest businessman. When the railroad's offer comes that same morning, Rogers accuses him of ruining his life and flees.
Later, Lapham goes to see the West Virginia paint company to see if they are willing to give him more time to raise the money. Realizing that she was not supportive enough of Silas when Rogers called upon her (since she still felt guilty about Silas' earlier mistreatment of Rogers), Persis decides that she wants to support Silas and visits his office. Silas is not there, but she does find Zerrilla at his desk. Not recognizing Zerilla, she thinks that she is related to the "Mrs. M." payments and is Silas’ mistress. Persis is incredibly angry and confronts Silas, who flees without explanation. Persis goes back the next day to confront Zerrilla, but she finally recognizes her and realizes why Silas has been giving her handouts. Persis forgives Silas and recognizes that his kind heart has never changed. Later, with Tom's help, Penelope and Persis find that he has gone to Lapham, where the works in Vermont are. Penelope and Tom reconcile, and Irene shows up. She is cordial to Tom and appears more resilient than ever, having returned from the West to support her family.
Silas returns and announces his impending bankruptcy. He has received a different investor’s offer for the works in Lapham, but he did not accept it because he could not withhold information about the works' failing business from the investor. To clean his hands from his debtors, Silas and his family sell all their Boston property and move back to the farm in Vermont. Silas keeps making high-end, high-quality paint, and he sells the other mines out to the West Virginia Company. This cooperation with the West Virginians gives Tom Corey an opportunity to go and work with them. They will send him to Mexico and South America to work on the paint market, but before he goes, he marries Penelope. This eventually pleases the Laphams, who are happy to see Penelope married, as well as the Coreys, who never have to see the Laphams now that they have moved out of town. As the novel closes, the Reverend Sewell pays a visit to the Laphams on their country property and asks Silas if he would do it all over again. Silas says that he would, and he acknowledges how lucky he was to have had the fortune that he did in the first place.