Isabel Archer, a young, beautiful, and decidedly interesting American girl, arrives in England after being "discovered" in Albany by her eccentric aunt, Mrs. Touchett. Upon arrival at the Touchett home, Gardencourt, a spacious estate in southern England, she takes a keen liking to her uncle, Mr. Touchett, her cousin Ralph, and assorted dogs. A family friend, Lord Warburton, is also present – he’s immediately interested in her. Shortly thereafter, the smitten nobleman proposes to Isabel, but, despite his personal and financial charms, she turns him down.
It seems that Isabel is in high demand – another suitor named Caspar Goodwood arrives from Boston to continue to woo her. Another of Isabel’s American friends, an adventurous young lady journalist named Henrietta Stackpole, also arrives on the scene, eager to report on European life to her newspaper stateside. Isabel, Henrietta, and Ralph take a field trip to London for some time, where Isabel encounters Caspar Goodwood, who also proposes. Despite her attraction to him, Isabel turns her American suitor down as well.
Henrietta flounces off elsewhere, and Isabel and Ralph return to Gardencourt, where Mr. Touchett’s health is failing. There, Isabel meets Madame Merle, an old friend of Mrs. Touchett’s, and the two become fast friends. Sadly, old Mr. Touchett dies, but not before Ralph convinces him to leave Isabel a fortune, so that she may live as she chooses. After Mr. Touchett’s death and the subsequent divvying up of money, Madame Merle takes an interest in Isabel and introduces her to a rather mysterious acquaintance, Gilbert Osmond.
Osmond is a little on the creepy side, but still fascinating (there’s a reason he was played by John Malkovich in the movie). He’s a smart, seductive man of the world. Osmond is a passionate collector of beautiful things: including art, furniture, and his lovely and innocent adolescent daughter, Pansy. Isabel’s family and friends begin to wonder if this strange man intends to make Isabel a part of his collection…
And, he does. After two years, Isabel and Osmond are married and live in a gorgeous old palace in Rome. We learn that Isabel had a baby, but the child died after six months. Isabel is wholly miserable in her marriage, but she is too proud to show her mistake to anyone. She isolates herself from her dearest friends, including Ralph, whose health is steadily declining. Osmond controls her life, and takes from Isabel the most important thing she possessed: her independence.
When Lord Warburton and Ralph come visit the unhappy family in Rome, we see just how controlling Osmond is; he is unhappy when Isabel even visits her ailing cousin in his hotel, and makes his anger known. He gives her the chance to do something to make him happy – get Lord Warburton to marry Pansy. However, with Isabel’s encouragement, Lord Warburton decides against the match, since Pansy is in love with someone else. Osmond is furious at Isabel for failing him in this task. The news that Ralph is dying back in England and wants Isabel to come see him one last time makes matters worse – Osmond refuses to let his wife go.
Sensing the weaknesses in their relationship, Osmond’s sister, Countess Gemini, lets slip a horrifying fact. Isabel suddenly learns that she was always simply a pawn in Osmond and Madame Merle’s warped game. The two of them never acted in Isabel’s interest, nor did they act out of any love for her. Rather, by ensnaring Isabel in marriage, they wanted to ensure that Pansy, who is actually their (Osmond and Madame Merle's) illegitimate daughter, would be set for life. Stunned, Isabel visits Ralph before he dies. While she’s away from home, Caspar Goodwood professes his love for her one last time, but Isabel chooses to return to Rome (and Osmond), rather than escape with him.