Steppenwolf starts out all mysterious-like, with a preface that explains where the manuscript comes from. It's a juicy story; we find out that the novel we are about to read is actually the papers and records left at a boarding house by a guy who called himself the Steppenwolf (real name Harry Haller), which is the German word for "wolf of the steppes".
Oh, and the steppes are the big, flat grasslands of Russian and southeastern Europe.
So anyway, the narrator of the preface explains that this middle-aged loner, Harry, came to live at his aunt's boarding house and stayed for almost a year. He tells us that the Steppenwolf came, did a lot of sniffing (like a wolf), decided that the aunt's house smelled good, and asked to rent a room. He left behind his records, which the narrator decides to publish.
We get to "Harry Haller's Records", a.k.a. the novel, and dive into the Steppenwolf's crazy psyche. Now we have Harry's first-person perspective on what the narrator has tried to prepare us for, and believe us, it really is "for madmen only."
Harry's account starts out with him leaving the boarding house to wander the streets. He sees an arched doorway that he'd never noticed before. In fact, he thinks it might have just appeared out of the blue. He decides to check it out and sees that it has writing over it that says "Magic Theater; Entrance Not for Everybody."
Harry can't get the door open (can't he read the sign?), but finds more words shining on the ground as he leaves that say "For Madmen Only!" And it takes one to know one… they're talking to the insane-o Steppenwolf.
The wandering continues, and finally Harry sees a guy, who seems to be a cigar salesman, carrying a sign advertising an anarchist evening, which is obviously everybody's idea of a good time. Of course the Steppenwolf has got to check this out, and asks the guy about the party. The cigar salesman is not interested in inviting Harry, tells Harry it's not for everybody, and gives him a book.
It turns out that the book is called "Treatise on the Steppenwolf" and is about Harry! Trippy, right? The book is about how silly Harry is for believing that he is the Steppenwolf. The deal is that his personal philosophy divides him into two: Harry, the man, and the Steppenwolf, which is his cruel animal side. The book says that Harry's a fool for thinking that way, because actually he has infinite natures, not just two.
Then Harry has to learn the lesson the hard way, because he doesn't believe what the book says. After a fight with an old friend he decides he will kill himself, but stops in at a dance hall before he goes home to do the deed. He meets a woman there named Hermine, who turns out to be a prostitute, who befriends him and keeps him safe from suicide that night.
Hermine turns Harry's life upside down. She teaches him how to dance, and sends him one of her prostitute buddies, Maria, to entertain him every now and then. She also gets a little bit creepy, telling Harry that she will make him fall in love with her and that he'll have to kill her. Everyone's idea of an awesome girlfriend, right?
Harry's plan is to step out and show off his new moves at a costume ball, and it turns into quite the trip. He takes some funky drugs and ends up in crazy magic theater (the one advertised way back at the beginning of the book) where he goes into different rooms and experiences different scenes from his life and imagination. In the end he kills Hermine as promised, but it isn't clear whether it's true or part of the hallucination.
It turns out Harry still has a lot to learn about becoming happy. Huh. We never would have guessed?