A couple of prisoners, Cavalletto and Rigaud, are in a Marseilles jail. Cavalletto is a minor smuggler serving out his sentence. Rigaud is a murderer who's about to go on trial.
Meanwhile a boatful of people are released from quarantine in England. Arthur Clennam has just returned from 20 years in China. His dad is dead, so he goes to visit his mom, the cold, monstrous, wheelchair-bound Mrs. Clennam. Mom and dad ran some kind of semi-shady business, and Arthur is visiting in part to tell his mom he doesn't want to work for Clennam & Co. anymore. He has also come to ask his mom about the strange feeling he has that somehow, somewhere, someone has been screwed over by the Clennams. Mrs. Clennam is all stonewalling and denial. And since Arthur has abandoned the family company, his part of the business is taken over by Flintwinch, Mrs. Clennam's manservant.
In quarantine, Arthur befriended the Meagleses. Mr. Meagles is a retired businessman who now travels with his family. They have a beautiful but immature and spoiled daughter named Pet, and a maid whom they rescued from an orphanage and named Tattycoram. When Arthur goes to visit the Meagles family at their house, he falls in love with Pet. He also meets a rival, the cynical, sarcastic, and generally negative and unpleasant (though super-hot) Henry Gowan. Obviously, Pet is totally into Gowan and just likes Arthur as a friend.
At Mrs. Clennam's house, Arthur meets Little Amy Dorrit, the youngest daughter of a guy who's in prison for debts. She takes care of her whole Dorrit family and makes sure to keep up her father's charade of being a gentleman fallen on hard times. The other Dorrits are sister Fanny, a dancer who rejects the marriage proposal of Edmund Sparkler, stepson of the world's richest capitalist, Mr. Merdle; brother Tip, general ne'er-do-well; and uncle Frederick, an old half-senile man. Amy is super self-sacrificing, kind of masochistic, and looks like a high school freshman despite actually being 22. Arthur befriends her and tries to figure out if she has some connection to his mother or to the person Clennam & Co. screwed over at some point.
Arthur tries to deal with Mr. Dorrit's debts – or at least to figure out how much Dorrit owes and to whom. This involves many infuriating and useless trips to the giant, horrible central bureaucracy known as the Circumlocution Office. All his efforts are totally fruitless, but Arthur does meet Daniel Doyce, an inventor and factory owner in London who is an all-around awesome guy. They befriend one another, and Arthur becomes a partner in the Doyce's factory, doing accounting or some such thing.
One day Arthur runs into Cavalletto, who himself has just been run into by a carriage (rim shot)! He takes Cavalletto to the hospital, then gets him a job at the factory and an apartment nearby. Also nearby is Flora Finching, Arthur's ex-girlfriend from about 20 years ago, who is now silly and chubby. Her dad, Mr. Casby, is the landlord at the place where Cavalletto is renting a room, and Mr. Casby has an assistant named Pancks. (Yep, all of these details do become important.)
Little Dorrit and Arthur grow to be best buds, or faux father and daughter, or something platonic like that. Though sadly, Amy likes likes Arthur, he just wants to be friends. At the same time, Pet and Gowan get more and more serious, until finally they get married. Arthur is totally crushed as Pet tells him she'll always think of him as a nice guy. Yeah, hot popular girls are like that. Tattycoram, overcome with jealousy and rage, runs away from the Meagleses and goes to stay with Miss Wade, a beautiful, lonely, totally miserable and mean woman they all met while traveling.
Now we shift back to Rigaud, the prisoner in Marseille. Rigaud's trial ended because of lack of evidence and he was let go. Now he calls himself Blandois and comes to London with a letter of introduction and credit from some bank in Paris. He visits Mrs. Clennam to do some mysterious business and seems menacing and evil. Arthur tries to figure out what kind of business this totally heinous dude would have with his mother but doesn't learn anything.
Everyone who meets Little Dorrit thinks she's the best thing ever. Flora Finching gives her work for Arthur's sake. Pancks, meanwhile, starts doing some research into the Dorrit family. And his research shows that… Mr. Dorrit is actually heir to a massive fortune! He's rich, not poor! Out of jail for him! Yay, everybody wins!
OK, not exactly. But the Dorrits are suddenly very rich. Snobby, obnoxious, self-important Dorrit immediately starts pretending that everyone he knew when he was in prison doesn't exist and the family goes abroad. Fanny and Amy get a governess (to teach them to be high-society ladies), Mrs. General, who goes through life ignoring anything and everything unpleasant. Fanny and Tip take to being rich and fancy right away. Dorrit does too, although he's too pompous to really own it. But, to the annoyance of everyone around her, Amy can't get used to the their new lifestyle,
In Italy the Dorrits bump into the Gowans, and Amy sees how miserable Pet is with her crappy new husband. Oh, well, too late. Traveling with the Gowans is Blandois, who for some reason is now Henry Gowan's BFF. Pet and Amy are scared of him.
Back in London everyone is sad. The Meagleses miss their daughter. Arthur misses Little Dorrit, but he still doesn't get why. He dedicates his life to his work and thinks of himself as an old man. Doyce gets sick of not being able to patent his inventions in England and goes abroad to Russia, where they actually value smart people with good ideas. The business plugs along.
In Italy Fanny again runs into the Merdles and Edmund Sparkler. They all pretend this Fanny is a totally new person, not at all the dancing girl Sparkler liked before, and that's fine on all sides. Sparkler is a boring idiot, but Fanny eventually decides to marry him anyway in order to make her mother-in-law's life miserable.
Pet and Gowan continue along in unhappiness. Pet has a baby. Everywhere they go Gowan somehow makes everyone think that he married a woman beneath him, and isn't he a wonderful romantic for doing so. There's a crazy moment when Gowan's dog almost attacks Blandois and Gowan beats the dog mercilessly. A few days later, the dog mysteriously dies.
Dorrit invests all his money with Merdle, Fanny's new (step)father-in-law. Then he goes back to Italy, all prepared to ask Mrs. General to marry him. But he has a mental collapse of some kind, freaks out, and has to be removed from a fancy dinner party when he starts acting as though he's back in prison. A few days later he dies. A few hours after that, his brother Frederick dies too.
Blandois keeps menacing Mrs. Clennam, until one day he just disappears. This looks bad for Mrs. Clennam, because it kind of seems like maybe she had him killed. Arthur is worried and starts a bunch of investigations to look for Blandois. Mr. Meagles looks for him around Europe, Arthur goes to ask Miss Wade about him, and Cavalletto goes to look for him among the various immigrant communities in London. At Miss Wade's, Arthur finds out that the reason Blandois was hanging out with Gowan was that Miss Wade was paying him to spy on him and Pet. Turns out Miss Wade was seduced by Gowan, who promptly left her. Oh, and also Miss Wade is some kind of sadomasochistic crazy lady, or something. Tattycoram is still with her.
Back in London, things couldn't be going better for Merdle, except for the fact that he's scared of his butler. He is making money hand over fist, he's about to get an aristocratic title, and the Circumlocution Office has given stepson Edmund Sparkler a cushy no-work government job in exchange for the Parliament seats that Merdle controls. Everyone wants to invest with him – even Pancks and Arthur. Arthur puts all the factory's money into Merdle industries. OK, hands up everyone who thinks that's a good idea? Didn't you ever hear the word "diversify," Arthur?
And then, just like that, it's all gone. One evening Merdle goes out for a walk, visits his stepson and stepdaughter-in-law (Fanny), borrows a penknife, goes to the public bath, and slits his wrists. Why? Well, it turns out he was no great mover and shaker after all, just a really great shakedown artist. The whole thing was a giant Ponzi scheme, and now everyone's investments are totally gone.
Arthur has lost the whole of Doyce & Clennam's money. He feels horrible, declares himself openly to be at fault, and is promptly arrested and thrown into debtor's prison. The same debtors prison, in fact, that the Dorrits used to live in. In jail Arthur finally figures out that – duh – Amy is in love with him and that – double duh – he's in love with her too. She comes back to London and takes care of him. But now he feels like a loser who shouldn't drag her down with him, so he kind of pushes back on the whole romance thing.
One day Cavalletto comes back with Blandois in tow. But since Arthur is in jail, he can't do much about the situation besides inform the authorities that that his mother is not a murderer. Done and done.
Blandois goes about his business: blackmailing Mrs. Clennam. It turns out he knows quite a few things about her. Remember that thing Arthur was worried about – that the family had screwed someone over at some point? Oh, boy is that ever true. Turns out Mrs. Clennam took Arthur from his real mom to punish her for having had a relationship with Arthur's dad (Mrs. Clennam's husband). Also, Mrs. Clennam suppressed a will having to do with all of this, which would have made the Dorrits rich instead of having to rot in debtor's jail for years and years. Confused? No doubt. Check out the "What's Up with the Ending?" section for a more detailed explanation of this rigmarole.
Mrs. Clennam freaks out, somehow regains the ability to walk, and runs to tell Amy Dorrit the whole story, leaving Blandois in her house. When Amy and Mrs. Clennam return, the house collapses, killing Blandois. Flintwinch escapes with all the Clennam & Co. money. Mrs. Clennam becomes catatonic and paralyzed for the rest of her life. Doyce comes back, forgives Arthur for his misdeeds, and sets him back up at the factory in his old job. Amy proposes to Arthur and they get married and live quietly ever after. Woo-hoo!