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The year is 1775. On a mission for his employer, Tellson's Bank, Mr. Jarvis Lorry travels to Dover to meet Lucie Manette. On his way, Mr. Lorry receives a mysterious message and replies with the words "Recalled to life." When they meet, Mr. Lorry reveals to Lucie that her father, Dr. Alexandre Manette, who she thought was dead, is still alive. Dr. Manette had been secretly imprisoned for 18 years in the Bastille, but his former servant Monsieur Defarge, who now owns a wine shop in Paris that is a center of revolutionary activities, has smuggled Dr. Manette out of prison and hidden him in the store's attic. Meanwhile, Defarge's wife, Madame Defarge, secretly encodes the names of the Revolution's enemies into her knitting. Mr. Lorry and Lucie arrive in Paris to find Manette compulsively making shoes in a dark corner—prison has left him insane. Lucie lovingly restores him to himself and they return to London.
The year is 1780. In London, Charles Darnay stands trial for treason as a spy. Lucie and Dr. Manette attend, having met Darnay during their return from France. The defense lawyer is Mr. Stryver, but it is his bored-looking associate, Sydney Carton, who wins the case. Carton points out how much he himself resembles Darnay in order to ruin the main witness's credibility.
In France, the wealthy aristocracy wallows in luxury and ignores the suffering poor. Marquis St. Evrémonde recklessly runs over and kills a child with his carriage. At his castle, he meets his nephew Charles Evrémonde (a.k.a. Darnay) who has returned to France to renounce his family. That night, the Marquis is murdered in his sleep.
Back in England, Charles, Stryver, and Sydney Carton all frequently visit Dr. Manette and Lucie. Mr. Stryver plans to propose to Lucie, but Mr. Lorry warns him that his proposal is unlikely to be accepted. Carton also admires Lucie; he tells her how she makes him believe that, despite his ruined past, he still has a shred of goodness deep within him. Charles obtains Dr. Manette's permission to marry Lucie, but Manette refuses to learn Charles's real name until the wedding day. On the wedding day, Dr. Manette relapses into his shoe-making madness after discovering that Charles is an Evrémonde. Mr. Lorry helps him recover. Charles and Lucie soon have a daughter of their own.
The year is 1789. Defarge leads the peasants in destroying the Bastille. He searches Dr. Manette's old cell and finds a letter hidden in the chimney. The new Republic is declared, but its citizens grow extremely violent, imprisoning and killing aristocrats. Charles's former servant, Gabelle, writes a letter from prison asking for help. Charles secretly leaves for Paris and is immediately taken prisoner. Mr. Lorry travels to Paris on bank business and is soon joined by Lucie and Dr. Manette. Because of his imprisonment, Dr. Manette is a local hero. He uses his influence to get Charles a trial, but it takes over a year. Every day Lucie walks near the prison hoping Charles will see her. Charles is finally freed after Dr. Manette testifies. But that very night, he is arrested again on charges brought by Monsieur and Madame Defarge.
Miss Pross and Jerry Cruncher have come to Paris to help. On the street, they run into Miss Pross's brother, Solomon Pross, whom Jerry recognizes from Charles's English trial as John Barsad. Sydney Carton also shows up and, threatening to reveal Barsad as a spy, forces his cooperation to help Charles.
At Charles's second trial, Defarge produces Dr. Manette's letter from the Bastille, which explains how the twin Evrémonde brothers—Charles's father and uncle—brutalized a peasant girl and her brother, then imprisoned Manette to protect themselves. Charles is sentenced to death and sent back to prison. Realizing his letter has doomed Charles, Dr. Manette loses his mind. That night, Carton overhears Madame Defarge at her wine shop plotting against Lucie and her daughter in order to exterminate the Evrémonde line. It is revealed that Madame Defarge was the sister of the peasants the Evrémondes killed.
Carton conspires with Mr. Lorry to get everyone in a carriage ready to flee for England. With Barsad's help, Carton gets into Charles's prison cell, drugs him, and swaps clothes with him. Barsad drags the disguised Charles back to Mr. Lorry's carriage, which bolts for England. Madame Defarge shows up at Lucie's apartment, but Miss Pross blocks her way. The two scuffle. When Madame Defarge tries to draw her pistol, she accidentally shoots herself. The blast deafens Miss Pross for life.
On his way to the guillotine in place of Charles, Carton promises to hold hands with a young seamstress, who has been wrongly accused. He dies knowing that his sacrifice was the greatest thing he's ever done.