Gaffer Hexam is a poor waterman who scavenges the River Thames with his daughter Lizzie. One day, he comes across a dead body that is identified as that of John Harmon. The death becomes the talk of London’s high society. It turns out that John was coming back to London from abroad after the death of his father, old Mr. Harmon. Old Mr. Harmon made a fortune dealing in mounds of dust (garbage, particularly ash and cinder). He left his fortune to John, on the condition that John come home and marry a young woman named Bella.
Unbeknownst to London society, however, John is actually alive: the dead man was actually George Radfoot, who had swapped clothes with John as part of a scheme for John to check on Bella before being forced to marry her. While in George’s clothes, John was robbed and left for dead by Roger and George. John goes on to first use the alias Julius Hanford and then John Rokesmith, hiding his true identity for much of the novel.
The lawyers Mortimer Lightwood and Eugene Wrayburn investigate the case. At the investigation of the body, Julius Handford shows up and soon disappears. Since John has been declared dead, all of old Mr. Harmon’s fortune ends up going to his former servant, Noddy Boffin, and his wife, Henerietty Boffin. They aren’t used to an upper-class lifestyle, and their attempts to fit in are at first humorous. Boffin, who’s illiterate, hires a street vendor with a wooden leg named Silas Wegg to come to his house and read to him.
Eventually, the Boffins start to feel that they should use their wealth to help others. They take in Bella and treat her like a daughter, since she suffered a great misfortune when her intended husband, John Harmon, died. Bella is beautiful and charming but obsessed with money. Though she suspects it’s wrong, she can’t help wanting to marry a rich husband. The Boffins also hire a secretary to manage their affairs: a mysterious man named John Rokesmith, who has been staying as a lodger with Bella’s parents, Mr. Wilfer and Mrs. Wilfer. While working as Rokesmith, John falls in love with Bella and confesses his love to her, but she rejects him because she wants a wealthy husband.
Meanwhile, a couple named Alfred and Sophronia marry after being set up by the new-money Veneerings. Both Alfred and Sophronia believe the other is rich, and they’re disappointed to learn otherwise only after they’re trapped in a marriage. Still, together they scheme to get some of the wealthy Mr. Podsnap’s fortune by trying to get their accomplice, Fascination Fledgeby, to marry Podsnap’s daughter, Georgiana.
Suspicion for John Harmon’s murder falls on Gaffer, particularly after his estranged former scavenging partner, the fellow waterman Roger “Rogue” Riderhood, tries to place the blame on him in order to claim the reward money. Mortimer and Eugene come with the Inspector when he goes to arrest Gaffer, and Eugene in particular takes an interest in Lizzie. When the Inspector goes to arrest Gaffer, however, it turns out that he drowned in a boating accident. Lizzie ends up going to live with Jenny Wren, a mysterious young dressmaker for dolls who takes care of her alcoholic father, Mr. Dolls, as if he were her own “bad child.”
Both Eugene and a man named Bradley Headstone (the headmaster at the school Lizzie’s brother Charley now attends) take a romantic interest in Lizzie. Headstone in particular becomes obsessed and starts to resent Eugene, who seems to be closer to winning Lizzie’s affection. Lizzie eventually goes into hiding to avoid both men with the help of Mr. Riah, a Jewish man who works for Fledgeby. Fledgeby has a strong prejudice against Jewish people, and he makes Riah do the worst tasks for Fledgeby’s business, Pubsey and Co., like calling in people’s loans. Fledgeby makes Riah call in loans on Alfred, Sophronia, and a wealthy man named Twemlow, then forces Riah to pretend to be in charge of the company. This means that Riah, and not Fledgeby, takes the blame for ruining people’s lives.
Boffin’s new money seems to be turning him into a miser. This drives a wedge between him and Bella, who leaves his house. Bella eventually realizes that she does indeed love Rokesmith, despite his seeming lack of wealth. The two marry and live together for a while happily, with John refusing to either reveal his true identity or claim his family fortune because he feels they have no need of it yet.
Wegg, who is watching Boffin’s old house after Boffin moves into a new mansion, has found a will that he believes proves that Boffin’s claim on old Mr. Harmon’s wealth is illegitimate. He attempts to blackmail Boffin with the help of his friend, Mr. Venus, but Mr. Venus betrays him. It also turns out that the will Wegg had is outdated. Wegg gets kicked out, and Boffin keeps the fortune he inherited. Eventually, though, Boffin turns the money over to John and Bella after a chance encounter between John and Mortimer (who met John was using his Julius Handford alias) forces John to reveal his true identity.
Meanwhile, Headstone attempts to get rid of Eugene as a rival for Lizzie’s affections by murdering him and framing Roger Riderhood. Although Headstone gravely injures Eugene, he doesn’t kill him. The injury convinces Eugene to finally propose to Lizzie, putting aside his doubts about their differing social classes. They marry, and Eugene makes an unexpected recovery from his injuries. Roger tries to blackmail Headstone with evidence of the attempted murder, and the two of them get into a fight that leads to them both drowning in the river.
Sophronia finds she feels bad about her and Alfred’s plan to exploit Georgiana, and she has Twemlow expose the plot. She and Alfred fall into financial ruin and have to leave the country, although not before Alfred goes to beat up Fledgeby, who is the cause of many of their financial problems. After Eugene recovers, Eugene and Lizzie similarly have to leave the country for one of the colonies because of the stigma their marriage attracts, due to them being of different social classes.
During a party at the Veneerings’, Mortimer listens in amusement and disgust as people talk about what a pity it is that a gentleman like Eugene married someone as low-class as Lizzie. To Mortimer’s surprise and delight, Twemlow speaks out, saying that what’s most important is Lizzie’s good character and it’s no one’s place to judge the couple. Mortimer shakes Twemlow’s hand and leaves the party happily.