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The novel opens in the fall of 1941, just after the Great Depression, in Lorain, Ohio. Nine-year-old Claudia MacTeer and her 10-year-old sister, Frieda, live with their parents in an "old, cold and green" house. What they lack in money they make up for in love. The MacTeers decide to take in a boarder named Mr. Henry. At the same time, they also take in young Pecola Breedlove, whose father recently hit her mother and tried to burn down the family home. Pecola is a quiet, awkward girl who loves Shirley Temple, believing that whiteness is beautiful and that her own blackness is inherently ugly.
Pecola's home life is difficult. Her father, Cholly, abuses alcohol and her parents fight constantly. Pecola begins to think that if she were prettier, her parents would be nicer to each other and to her. Since Pecola equates beauty with whiteness, she begins to pray for blue eyes in order to change the way she sees the world as well as the way she is seen by others. Above Pecola's house live three prostitutes – Miss Marie, Poland, and China. These women use men for money, curse, spit, and laugh. They are also genuinely kind to Pecola and tell her stories about love, sex, and money.
Pecola gets teased at school by boys, and by the new, light-skinned girl, Maureen Peal. One winter day, Claudia tries to punch Maureen for making fun of Pecola, but she misses and punches Pecola dead in the face instead. Junior, a young black boy from the neighborhood, lures Pecola into his house and attacks her with a cat. Later, when he kills the cat, he blames it on Pecola, causing his mother to yell at her and kick her out of the house.
In the spring of 1942, Mr. Henry gropes Frieda and gets kicked out of the MacTeers' house. Through flashback, the narrator reveals the histories of Cholly and Pauline Breedlove. Pauline has a deformed foot that has always made her feel like an outcast in her huge family. We see her as a young girl, losing herself in church songs and romantic fantasy, always imagining someone who would love her and save her. From Hollywood movies, she learns about beauty and begins to emulate white celebrities like Jean Harlow.
We also learn about Cholly, who is abandoned by his mother near train tracks when he is four days old. He gets taken in by his great aunt, Jimmy, who raises him until her death. The day of Jimmy's funeral, Cholly has his first sexual experience with Darlene, a local girl. While they are having sex in a field, two white men approach them and shine a flashlight on them. They laugh at the pair and force them to continue having sex while they watch and laugh. Cholly and Darlene are humiliated, and Cholly, unable to direct his anger at the white men, turns it onto Darlene instead. He spends the next few years moving from city to city and from woman to woman. He meets and weds Pauline in Kentucky and the couple moves to Lorain, Ohio.
Back in the present, Cholly comes home drunk one day to find Pecola washing dishes. Cholly rapes her in the kitchen. When it's over, he covers her with a quilt. Pauline finds Pecola unconscious on the floor. When Pecola tells her that Cholly raped her, she doesn't believe it and hits her. Cholly rapes Pecola again at some point after this, although it's unclear exactly when.
Pecola becomes pregnant with her father's child. She visits Soaphead Church, a quack psychic and healer, and asks him to give her blue eyes. Soaphead tells Pecola to give his dog some meat, and if the dog acts strangely, she will get her wish. Pecola doesn't realize that Soaphead hates the dog and has given her poison to feed to it. When the dog begins to gag and limp around, Pecola believes she will receive her blue eyes.
Claudia and Frieda learn of Pecola's pregnancy through neighborhood gossip. Although everyone else in Lorain wants the baby to die, Claudia and Frieda pray that it survives. They spend the summer of 1942 planting marigold seeds in the hopes that if the flowers blossom, Pecola's baby will survive. Pecola's baby dies. Pauline and Pecola move to the edge of town and Pecola begins to lose her mind. Pecola can be seen looking into a mirror, talking to herself about her blue eyes, and picking through trash.