We begin by meeting two families, one rather odd, and one super conventional. The odd family is the Schlegels, three orphaned siblings – Margaret, Helen, and Tibby – of an academic, quirky, and liberal background. The ordinary family is the Wilcoxes, represented by Mr. and Mrs. Wilcox and their three children, Charles, Paul, and Evie. The Wilcoxes are wealthy and industrious, while the Schlegels inherited their money and spend most of their time talking about art, politics, and literature.
The two families encounter each other at various points, but things get awkward after Helen and Paul embarrassingly fall in and out of love over the span of 24 hours. However, Margaret and Mrs. Wilcox strike up an odd friendship, despite the awkwardness between the two clans, and before Mrs. Wilcox dies rather suddenly, she changes her will and leaves her beloved family home, Howards End, to Margaret. This upsets the Wilcoxes, who don't think that Margaret, a stranger, has any right to the house, so they ignore the change and go about their business.
Meanwhile, the Schlegels befriend a lower-middle class young man, Leonard Bast, who has ambitions of intellectualism, but is held back by his lack of funds (and by his trashy wife, Jacky). Leonard provides a kind of tragic counterpoint to the life of effortless bohemianism of the Schlegels, and to the businesslike, bustling Wilcoxes; instead, he's always yearning for more than is available to him. Through a rather complicated turn of events, Leonard loses his job as a clerk, and falls into even worse circumstances; this was caused by advice that Henry Wilcox gave the Schlegels, which they passed on to Leonard. Helen sees their young friend's fall as Henry's fault.
Against all odds, Henry and Margaret become friends – and then more than friends. They get married, despite the differences between the two of them. It later scandalously emerges that Leonard's lowbrow wife, Jacky, used to be Henry's mistress, and that he abandoned her abroad (contributing to her bottom-of-the-barrel social position), and Henry and Margaret have to work through the issues produced by this revelation. Helen and Margaret drift further and further apart as Margaret is absorbed into the Wilcox clan. Their relationship hits a low when Helen tries to get Henry to financially help the Basts (he refuses because of his former relationship with Jacky).
This is where things go a little crazy. Helen, caught up in her sympathy for Leonard, has an affair with him, the result of which is pregnancy. She flees to Germany, trying to hide her pregnancy from her family and friends, but ultimately is forced to return to England. There, Henry and Margaret ambush her at Howards End, where they discover the truth; Margaret forces Henry to forgive her sister for her scandalous affair, since she herself has forgiven him his (with Jacky). Charles, Henry's hot-headed son, accidentally kills Leonard with a sword (yep, you heard that right) for bringing shame upon the family, and is sentenced to prison for manslaughter.
It seems that everything is falling apart for the Wilcoxes and Schlegels – but, in fact, it's the beginning of a new life for them. Henry finally begins to sympathize and truly connect with other people, as Margaret's been encouraging him to do all along. In the end, the two of them, along with Helen and her baby, form a kind of new, unified family, out of the fragments of the old ones. We end up at Howards End, which Henry bequeaths to Margaret and her nephew, as a beautiful summer arrives, along with a tentative new hope for England.