The novel is set in 1811-12 in the period of Luddite riots with Robert Moore, tenant of Hollow's-mill, encountering trouble when he tries to bring in new equipment.

Moore lives at Hollow's cottage with his sister Hortense, who teaches Caroline Helstone, niece of the rector of Briarfield. One evening after Caroline has been dining with Moore and his sister, she realises that she is in love with Moore, and believes him to feel the same about her. Caroline's tedious and oppressed life at the Rectory is evoked with descriptions of visits by Mrs Sykes and her daughters and of visits by the three local curates.

Mr Helstone and Moore quarrel and Caroline's uncle forbids her from having anything further to do with the Moores. Caroline herself has felt uncertain due to Moore's changeability. She determines to try to prepare herself for life without marriage, visiting two elderly spinsters, Miss Mann and Miss Ainley. Under the influence of Miss Ainley, Caroline decides that she must do more to help the poor of the area.

Mr Helstone introduces Caroline to Shirley Keeldar, who has just come into her inheritance and is living nearby at Fieldhead. There, she also meets Mrs Pryor, Shirley's former governess and now companion. Caroline becomes good friends with the fiercely independent Shirley and forms a strong attachment to the gentle Mrs Pryor.

Caroline still hopes to meet Moore on her frequent walks and one evening sees him talking to Shirley. Caroline later confesses to her maid that she thinks that Moore will marry Shirley. Moore is reconciled with Mr Helstone; soon after this Hollow's-mill is attacked. Moore is wounded and Shirley has to prevent Caroline from rushing to him.

Shirley's relatives, the Sympson family, arrive to stay at Fieldhead. While visiting Hortense, Caroline meets Louis Moore, Robert's brother, who is tutor to Henry Sympson, Shirley's young cousin. Hortense suggests that Robert Moore is favoured by Shirley. Caroline falls into a grave illness and Mrs Pryor is sent by Shirley to nurse her. Mrs Pryor reveals that she is Caroline's mother, her real name is Agnes Helstone. Caroline, given a reason to live, recovers.

A number of incidents occur in which Louis Moore shows tender feelings towards Shirley, his former pupil. The strength of Louis Moore's feelings are made clear to the reader as he broods over her desk in her absence. Shirley has had several proposals of marriage which she has rejected despite pressure from the Sympsons and on a journey with Mr Yorke, Robert Moore confesses that he proposed to Shirley some time ago and was turned down. On the same journey Moore is shot at and wounded and is taken to Mr Yorke's house to recover. Yorke's young son arranges for Caroline to see Moore, which helps his recovery.

Louis and Shirley declare their love. Moore proposes to Caroline and she accepts. Moore states that Caroline has changed his views and that in future he will take on more workers and that she shall set up a Sunday School. The novel ends with a double wedding.