In the Sandleford warren,[a] Fiver, a young runt rabbit who is a seer, receives a frightening vision of his warren's imminent destruction. When he and his brother Hazel fail to convince their chief rabbit of the need to evacuate, they set out on their own, accompanied by nine other rabbits who choose to go with them. The first challenge in the small band's search for a new home comes immediately, as they are forced to elude the Owsla, the warren's military caste.
Once out in the world, the travelling group of rabbits finds itself following the leadership of Hazel, who, until now, has been just another unimportant member of the warren. The group travels far and through dangerous territory. Bigwig and Silver, both former Owsla and the strongest rabbits among them, do well to keep the others protected, along with Hazel's keen observations and good judgement.
They meet a rabbit named Cowslip, who invites them to join his warren. At first Hazel's group are relieved to finally be able to sleep and feed well – except for Fiver, who senses only death there. When Bigwig is nearly killed in a snare, the group realize that the new warren is managed by a farmer who protects and feeds the rabbits, but also harvests a number of them for their meat and skins. The residents of the new warren are simply using Hazel and the others to increase their own odds of survival. Fiver and the rest of the group work together to rescue Bigwig from the snare, then continue on their journey, taking with them a rabbit from Cowslip's warren called Strawberry, who asks to join them after his doe is killed in a snare.
Fiver's visions have promised them a safe place in which to settle, and the group eventually finds Watership Down, which matches Fiver's description of the perfect home exactly. There they are soon reunited with Holly and Bluebell, who were with Bigwig in the Owsla. The two are nursing severe injuries which, they reveal, were inflicted as they escaped the violent human destruction of Sandleford and then later at Cowslip's warren. Holly also confesses that it was he who had tried to stop them leaving that first night, but Fiver's vision coming true has left him a changed rabbit and he is there to join them in whatever way they will have him.
Although Watership Down is a peaceful habitat, Hazel realizes there are no does (female rabbits), making the future of the warren certain to end with the inevitable death of the rabbits present. With the help of their useful new friend, a black-headed gull named Kehaar, they locate a nearby warren called Efrafa, which is overcrowded and has many does. Hazel sends a small embassy, led by Holly, to Efrafa to present their request for does.
Meanwhile, Hazel and Pipkin, the smallest member of the group, scout the nearby Nuthanger Farm, where they find two pairs of hutch rabbits. Despite their uncertainty about living wild, the hutch rabbits are willing to come to Watership. Hazel leads a raid on the farm the next day, during which he rescues both does but only one of the bucks. When the emissary returns soon after, Hazel and his rabbits learn that Efrafa is a police state led by the despotic General Woundwort. Holly and the other rabbits dispatched there have managed to return with little more than their lives intact.
However, Holly's group has managed to identify an Efrafan doe named Hyzenthlay who wishes to leave the warren and can recruit other does to join in the escape. Hazel and Bigwig devise a plan to rescue Hyzenthlay's group and bring them to Watership Down, after which the Efrafan escapees start their new life of freedom.
Shortly thereafter, however, the Owsla of Efrafa, led by Woundwort himself arrives to attack the newly formed warren at Watership Down. Through Bigwig's bravery and loyalty, and Hazel's ingenuity, the Watership Down rabbits seal the fate of the Efrafan general by unleashing the Nuthanger Farm watchdog. As the Efrafans flee in terror, Woundwort, despite being greatly wounded in his battle with Bigwig, refuses to back down and leaps at the dog. His body is never found, and at least one of his former followers continues to believe in his survival. Hazel is nearly killed by a cat, but he is saved by the farm girl Lucy, the owner of the escaped hutch rabbits.
The story's epilogue tells the reader of how Hazel, dozing in his burrow one "chilly, blustery morning in March" some years later, is visited by El-ahrairah, the spiritual overseer of all rabbits, and hero of many rabbit stories. El-ahrairah invites Hazel to join his own Owsla, reassuring him of his warren's success and its future. Leaving his friends and no-longer-needed body behind, Hazel departs Watership Down with the spirit guide.