The novel's narration begins in the first person with Captain Charles Ryder of the British Army (which he disdains) in the early 1940s. His troops have just arrived at their new camp, a large and beautiful estate called Brideshead Castle. Over the course of a flashback, Charles recounts his long and complicated history with the estate and the Flyte family that owns it.
It all starts at the beginning of Charles’s first year at Oxford University in 1922. Charles himself is from a wealthy family that includes his caustic father and older cousin Jasper, who advises him on what to study, where to eat, and whom to avoid in his early days at the University. Charles soon makes the acquaintance of Sebastian Flyte, an extremely wealthy, quirky, beautiful young man who obeys his every impulse, shirks his duties, charms the pants off everyone, carries around a teddy bear named Aloysius, parties like a rock star, and makes his first introduction to Charles by leaning his head into our narrator’s first-floor dorm room window and puking up several bottles of wine. The two boys quickly become the best of friends, much to Jasper’s exasperation (since Sebastian hangs out with "the wrong crowd" – partiers and not scholars).
Among Sebastian’s unorthodox friends is Anthony Blanche, a flamboyantly gay international playboy. Anthony takes Charles aside and tells him all about Sebastian and his family. Sebastian’s parents, Lord and Lady Marchmain, are separated. Lord Marchmain lives in Italy with his mistress Cara. Lady Marchmain, a very devout Catholic, refuses to get a divorce and lives at the family’s large and ornate country estate, Brideshead, as well as their home in London, called Marchmain House. Sebastian has three siblings: a stuffy and religious older brother, the Earl of Brideshead (simply called "Brideshead" or "Bridey"); a sister Julia who is a clever and self-indulgent beauty; and a younger sister Cordelia.
It soon becomes clear that Sebastian has major family issues. First of all, he struggles with the Catholicism his mother has so intently forced on her family. He also remains in close contact with his father, which Lady Marchmain seems to read as betrayal.
Charles and Sebastian spend the first summer away from Oxford together, at Brideshead. Charles briefly meets Sebastian’s sister Julia, but is largely alone with Sebastian for the duration of the vacation, getting quietly drunk every evening on the estate’s astounding wine collection. Because Charles is a burgeoning artist, he is in constant awe of the architecture and interior design of Brideshead Castle. He devotes quite a bit of text to describing it in detail, and interprets his summer there as a time he was "very close to heaven." During his stay he also meets Cordelia, Sebastian’s energetic and playfully troublemaking little sister, as well as Sebastian’s old Nanny, who for some reason still lives on the estate. When Sebastian’s brother Brideshead comes to dinner, Charles confirms that he is very much as Anthony Blanche predicted: stuffy, restrained, and grave. Religion seems an inevitable topic of conversation among the Flytes, especially when Charles, a self-proclaimed agnostic, is around.
Towards the end of the summer, Charles and Sebastian travel to Venice to visit Lord Marchmain (Sebastian’s father) and his mistress Cara. Cara provides some useful information for Charles: Lord Marchmain despises his wife and everyone who loves her; that’s why he’s left England. Cara adds that, while Charles drinks controllably and to have a good time, Sebastian drinks to drown his sorrows and is fast becoming an alcoholic.
The second year at Oxford, Anthony Blanche is absent, having decided to stay and party in Munich instead of returning to school. Charles pursues his interest in painting, and Sebastian continues to drink. Meanwhile Lady Marchmain, nervous about her son’s position at the university, comes to visit. She tries to befriend Charles to get him on her side in "helping" Sebastian. She also employs the help of Mr. Samgrass, a professor at Oxford, in trying to keep her son under control.
Soon after, Julia comes to visit, bringing with her a man named Rex Mottram who is suave, politically connected, and rumored to carry a gun. (He’s Tony Soprano meets James Bond, but he’s a bit of a wannabe.) Rex takes Sebastian, Charles, and one of their university friends, Boy Mulcaster, to a party. The Oxford guys sneak away to party at a club of ill repute and end up arrested for drunk driving. Rex gets them out of jail via his smooth-talking people skills. But because Sebastian’s family is so revered as part of England’s old aristocracy, his arrest makes for quite the scandal. Lady Marchmain cracks down, and both Sebastian and Charles end up stuck with a curfew back at Oxford, courtesy of Mr. Samgrass’s authority. Needless to say, they both hate Samgrass.
Meanwhile Charles notices that Sebastian’s drinking has indeed taken a turn for the worse. Though Lady Marchmain continues to try to keep Charles in her good graces, he ultimately chooses to side with Sebastian "against the world." Lady Marchmain gets fed up and pulls Sebastian out of Oxford, sending him off with Mr. Samgrass to tour around Europe.
Cut to Christmas at the end of the year. Charles is at Brideshead estate again with Sebastian and Samgrass, who have just returned from their European travels. Though it was Samgrass’s job to keep Sebastian sober and out of trouble, Charles soon discovers that he actually lost Sebastian, or rather, that Sebastian gave him the slip in order to drink himself silly. Meanwhile, at Brideshead, Lady Marchmain has instructed all the servants to not give Sebastian any alcohol. Charles feels bad for his friend and gives him money to buy booze. When Lady Marchmain finds out, she guilt trips Charles, who leaves when Sebastian tells him he’s no use around here anyway.
When Charles returns to Oxford, Rex Mottram visits him and explains that he wants to marry Julia. Lady Marchmain is against it, since he is about 15 years older than her daughter, not of noble blood, and of suspect business dealings. Also, he’s been sleeping with a married woman named Brenda Champion. Rex adds that Lady Marchmain has gotten very sick but refuses to see a doctor on account of her religion.
At this point the narrative time is disrupted and we get information in a scattered order through various flashbacks on Charles’s part. The quick and dirty is as follows: Julia agrees to marry Rex, though he has to convert to Catholicism first. They find out just before the wedding that Rex was married and divorced once, which means he can’t be married as a Catholic after all. They have a brief Protestant ceremony instead, to Lady Marchmain’s horror.
In the meantime Charles bumps into Anthony Blanche, who updates him on Sebastian: still a drunkard and worse than ever. Sebastian has also struck up a close friendship with a German sergeant. When Charles hears that Lady Marchmain is dying, he hurries to see her at Brideshead, where she apologizes for being so harsh about his siding with Sebastian against her. Then, at her request, Charles sets out to find Sebastian and bring him back to Brideshead to say good-bye to his mother.
Charles travels to Morocco and finds Kurt, the German sergeant with whom Sebastian is living. It’s clear that Kurt is taking advantage of Sebastian and using him for his money. Sebastian himself is ill in the hospital and, when confronted, defends his friendship with Kurt. He likes that, for once, he can finally take care of someone else, when all his life his family has been taking care of him. Then word arrives that Lady Marchmain has died.
Now we jump forward a few years. Charles is now a professional architectural painter – he paints people’s houses, usually before the buildings are torn down for one reason or another. He’s married, but we don’t know who his wife is yet. After tiring of British architecture, Charles traveled to South America to paint there. Then he met up with his wife to take a ship back to America. She’s just had their second baby, whom Charles hasn’t met yet and has no interest in seeing. The honeymoon is clearly over between these two, and Charles is basically masking (poorly) some intense hostility for his wife. We finally discover that the wife is Celia Mulcaster, sister to Boy Mulcaster, one of Charles’s friends from Oxford.
Meanwhile, Julia Flyte is also on this ship back to England and, during a violent storm at sea, she and Charles begin a passionate affair. This is problematic, since Julia is also married (to Rex) and also hates her spouse. It soon becomes clear, however, that both Celia and Rex have been adulterous in the past. So both Charles and Julia decide to get divorced and marry each other.
While staying at Brideshead estate together, Julia’s brother Bridey visits and announces that he’s getting married himself, to a widow who is apparently not attractive and has kids from her first marriage. Cordelia has returned home as well, bringing with her news of Sebastian. Kurt got himself arrested by the Germans and hanged himself; Sebastian drank in distress and ended up begging a monastery in Tunis to take him in. She predicts that her brother will live out his days there, trying to be holy and repeatedly lapsing into alcoholic binges until his liver gives up and he dies.
Both divorces (Charles's and Julia's) are in progress when Lord Marchmain announces that he’s dying and wants to live out his last days at Brideshead. He arrives with his mistress Cara to do so. When alone with Julia and Charles, he admits that he met Bridey’s new wife, Beryl, and despises her. He doesn’t want her living at Brideshead, so, although it’s tradition to leave the estate to the eldest son, he wants Julia and Charles to have it instead. Charles is a bit ashamed by his own joy at this prospect.
However, it never comes to fruition: Julia decides that in order to be a good Catholic, she needs to make a sacrifice, and she chooses to sacrifice her happiness with Charles. They break up shortly after her father’s death, which involves a heated debate over whether or not they should force the old man to see a priest. (Lord Marchmain was adamantly against religion). Charles, despite his previous agnosticism, is moved by the way Julia’s father receives the priest at his deathbed. Somehow or another Charles ends up a Catholic himself by the time we pull out of the flashback and return to him as a Captain in the Army revisiting Brideshead. The novel ends with Charles examining the estate and reflecting with optimism on the flame still burning in Brideshead’s little chapel.