Willy Loman, a traveling salesman, returns home to Brooklyn early from a sales trip. At the age of 63, he has lost his salary and is working only on commission, and on this trip has failed to sell anything. His son Biff, who has been laboring on farms and ranches throughout the West for more than a decade, has recently arrived home to figure out a new direction for his life. Willy thinks Biff has not lived up to his potential. But as Biff reveals to his younger brother Happy—an assistant to the assistant buyer at a department store—he feels more fulfilled by outdoor work than by his earlier attempts to work in an office.
Alone in his kitchen, Willy remembers an earlier return from a business trip, when Biff and Happy were young boys and looked up to him as a hero. He contrasts himself and his sons with his next door neighbor Charley, a successful businessman, and Charley's son Bernard, a serious student. Charley and Bernard, in his view, lack the natural charisma that the Loman men possess, which Willy believes is the real determinant of success. But under the questioning of his wife Linda, Willy admits that his commission from the trip was so small that they will hardly be able to pay all their bills, and that he is full of self-doubt. Even as Linda reassures him, he hears the laughter of The Woman, his mistress in Boston.
Charley comes over to see if Willy is okay. While they are playing cards, Willy begins talking with the recently deceased figure of his brother Ben, who left home at the age of seventeen and made a diamond fortune in Africa and Alaska. Charley offers Willy a job but Willy refuses out of pride, even though he has been borrowing money from Charley every week to cover household expenses. Full of regrets, Willy compares himself to Ben and their equally adventurous, mysterious father, who abandoned them when they were young. He wanders into his back yard, trying to see the stars.
Linda discusses Willy's deteriorating mental state with the boys. She reveals that he has tried to commit suicide, both in a car crash and by inhaling gas through a rubber hose on the heater. Biff, chagrined, agrees to stay home and try to borrow money from his previous employer, Bill Oliver, in order to start a sporting goods business with Happy, which will please their father. Willy is thrilled about this idea, and gives Biff some conflicting, incoherent advice about how to ask for the loan.
The next morning, at Linda's urging, Willy goes to his boss Howard Wagner and asks for a job in the New York office, close to home. Though Willy has been with the company longer than Howard has been alive, Howard refuses Willy's request. Willy continues to beg Howard, with increasing urgency, until Howard suspends Willy from work. Willy, humiliated, goes to borrow money from Charley at his office. There he encounters Bernard, who is now a successful lawyer, while the greatest thing Willy's son Biff ever achieved was playing high school football.
Biff and Happy have made arrangements to meet Willy for dinner at Frank's Chop House. Before Willy arrives, Biff confesses to Happy that Oliver gave him the cold shoulder when he tried to ask for the loan, and he responded by stealing Oliver's pen. Happy advises him to lie to Willy in order to keep his hope alive. Willy sits down at the table and immediately confesses that he has been fired, so Biff had better give him some good news to bring home to Linda. Biff and Willy argue, as distressing memories from the past overwhelm Willy. Willy staggers to the washroom and recalls the end of Biff's high school career, when Biff failed a math course and went to Boston in order to tell his father. He found Willy in a hotel room with The Woman, and became so disillusioned about his former hero that he abandoned his dreams for college and following in Willy's footsteps. As Willy is lost in this reverie, Biff and Happy leave the restaurant with two call girls.
When Biff and Happy return home, Linda is furious at them for abandoning their father. Biff, ashamed of his behavior, finds Willy in the back yard. He is trying to plant seeds in the middle of the night, and conversing with the ghost of his brother Ben about a plan to leave his family with $20,000 in life insurance money. Biff announces that he is finally going to be true to himself, that neither he nor Willy will ever be great men, and that Willy should accept this and give up his distorted version of the American Dream. Biff is moved to tears at the end of this argument, which deepens Willy's resolve to kill himself out of love for his son and family. He drives away to his death.
Only his family, Charley, and Bernard attend Willy's funeral. Biff is adamant that Willy died for nothing, while Charley elegizes Willy as a salesman who, by necessity, had nothing to trade on but his dreams. Linda says goodbye to Willy, telling him that the house has been paid off—that they are finally free of their obligations—but now there will be nobody to live in it.