Mrs. Ramsay, Mr. Ramsay (a philosopher), their eight children, and several guests are staying at the family's summer home in the Hebrides, on the Isle of Skye, just before the start of World War I. Just across the bay is a lighthouse, which becomes a prominent presence in the family's life. James Ramsay, the youngest child, wants to go to the Lighthouse the next day, but Mr. Ramsay crushes his hopes, saying that the weather will not be pleasant enough for the trip. James resents his father for his insensitivity as well as for his emotional demands on Mrs. Ramsay, and this resentment persists throughout the novel.
The houseguests include Lily Briscoe, an unmarried painter who begins a portrait of Mrs. Ramsay; Charles Tansley, who is not very well liked; William Bankes, whom Mrs. Ramsay wants Lily to marry, but Lily never does; and Paul Rayley and Minta Doyle, who become engaged during their visit.
Mrs. Ramsay spends the afternoon reading to James as Lily watches her from the lawn, attempting to paint her portrait. Mr. Ramsay also watches her as he walks and worries about his intellectual shortcomings, afraid that he will never achieve greatness. Andrew Ramsay, Nancy Ramsay, Paul Rayley, and Minta Doyle take a walk on the beach, where Paul proposes to Minta.
For the evening, Mrs. Ramsay has planned a dinner for fifteen guests including Augustus Carmichael, a friend and poet. The dinner gets off to a shaky start as Mr. Ramsay becomes angry with Mr. Carmichael for requesting more soup and no one seems to be enjoying the conversation. However, at a certain magical moment, everyone in the room seems to connect, and Mrs. Ramsay hopes that something permanent will result from this connection. Following dinner, Mr. and Mrs. Ramsay sit together in the parlor, and Mrs. Ramsay finds that she unable to tell her husband that she loves him. Nevertheless, though their unspoken communication she is sure that he knows. The Ramsays and their guests go to sleep.
In the second section of the novel, "Time Passes," the house is abandoned for ten years, suffering the ravages of time, neglect, and decay. Mrs. Ramsay unexpectedly dies one night, as does Prue in an illness related to childbirth. Andrew is the third Ramsay to die when he is killed instantaneously in battle. Mrs. McNab goes to the house occasionally to tidy it up and restore it, but it is not until she hears word that the remaining Ramsays will be returning for the summer that she gets everything in order.
In "The Lighthouse," all of the living Ramsays, as well as other guests (including Lily Briscoe), return to the summer home. Mr. Ramsay decides that he, James, and Cam Ramsay will finally take the trip to the Lighthouse, but the children are resentful of his domineering manner. He is angry about delays on the morning of the trip, and he approaches Lily for sympathy, but she is unable to feel any sympathy for him until he has already set off on the journey, when it is too late. Just as Mr. Ramsay decides to finally take this journey, Lily Briscoe decides to finally finish the painting that she started ten years ago.
On the boat, the children continue to resent their father's self-pity, yet as the ship approaches the Lighthouse, they find a new tenderness for and connection to him. As the boat reaches its destination, Lily paints the final stroke on her canvas and finally achieves her vision.