The novel is written from the perspective of Lazaro de Tormes, a town crier in the city of Toledo, telling his life story to an unknown superior in the form of a letter. In the novel’s short prologue Lazaro mentions that he is telling the story to better explain a certain matter into which his addressee has inquired, though the specifics of the matter are unclear.
Lazaro was born to a poor mother and father outside of Salamanca in Spain. His father was exiled when he was caught stealing from the mill where he worked, and he died at war shortly after that. Lazaro and his widowed mother move to Salamanca, where she finds work and settles down with a slave named Zaide who works in the stables. Lazaro’s mother has another child by Zaide, but then Zaide is caught stealing to provide for Lazaro and his family. The court forbids Lazaro’s mother from seeing Zaide again and she moves with her two sons into an inn where she finds work.
While at the inn, Lazaro’s mother meets a blind man who offers to take Lazaro as a servant, so Lazaro leaves his family to travel with the blind man, who makes a living by saying prayers in exchange for alms. Lazaro soon discovers that the blind man is a stingy and dishonest master. Lazaro endures many abuses and often goes hungry while in the blind man’s service, though he learns many lessons about how to survive. Eventually Lazaro musters the courage to leave the blind man’s service, but before he does he gets his vengeance; Lazaro stands the blind man in front of a stone pillar and tricks him into bashing his head against it by telling him he is standing on one side of a gulley that he needs to jump across.
Lazaro travels alone to a town where he meets a priest who agrees to take him on as a servant, but Lazaro soon discovers that this master is even more cruel than the last. The priest starves Lazaro, but soon Lazaro gets hold of a key to the locked chest where the priest keeps a store of bread and Lazaro helps himself. When the priest notices that one of his loaves has gone missing, Lazaro is forced to become more clever. He begins eating the bread so that it looks like mice have gotten into the chest. Eventually the priest catches on to this trick as well, and Lazaro is sent on his way.
Lazaro’s third master is a squire who has lost all his wealth but is obsessed with maintaining his status and the appearance of nobility. Lazaro takes pity on the squire, sharing the food he earns through begging in the town. When the squire is no longer able to pay his rent he abandons the house along with Lazaro. The landlords, upon discovering the house is empty inside, assume that Lazaro has stolen everything and threaten to punish him, but Lazaro’s neighbors defend him.
Lazaro works briefly for a friar before he moves on to another town where he meets a seller of indulgences who makes a living by convincing people to buy articles that he claims will pardon their sins. The seller of indulgences agrees to take Lazaro as his servant, and Lazaro participates in a scheme that results in all the people of one town purchasing indulgences.
Then Lazaro serves a tambourine painter briefly, followed by a chaplain for whom he leads a mule around town selling water. Lazaro keeps this job for several years and says little about it, but he is happy because it enables him to save money and provide for himself for the first time in his life. After this he works briefly for a constable before finally finding a job as a town crier in Toledo, advertising wine to earn his money.
While working as a town crier, the archbishop takes an interest in Lazaro and offers him one of his maids as a wife. Lazaro takes the archbishop’s offer despite widespread rumors that the maid is the archbishop’s mistress. Lazaro later confirms these rumors are true but he is happy to ignore them, as he and his wife receive some money from the Archbishop. In exchange Lazaro is willing for his sham marriage to protect the Archbishop’s reputation. At this point in the narrative it becomes clear that Lazaro’s arrangement with the archbishop is the matter Lazaro refers to in the prologue.