In the summer of 1922, Nick Carraway moves from Minnesota to work as a bond salesman in New York. Nick rents a house in West Egg, a suburb of New York on Long Island full of the "new rich" who have made their fortunes too recently to have built strong social connections. Nick graduated from Yale and has connections in East Egg, a town where the people with social connections and "old" money live. One night Nick drives to East Egg to have dinner with his cousin, Daisy and her husband Tom Buchanan, a classmate of Nick's at Yale. There, he meets Jordan Baker, a beautiful and cynical professional golfer. Jordan tells Nick that Tom is having an affair. Upon returning home from dinner, Nick sees his mysterious neighbor Jay Gatsby holding out his arms toward the Long Island Sound. Nick looks out across the water, but sees only a green light blinking at the end of a dock on the far shore.
A few days later, Tom invites Nick to a party in New York City. On the way, Tom picks up his mistress, Myrtle Wilson, the wife of George Wilson, the owner of an auto shop an industrial area between West Egg and New York City called the Valley of Ashes. At the party, Myrtle gets drunk and makes fun of Daisy. Tom punches her and breaks her nose.
Nick also attends one of Gatsby's extravagant Saturday night parties. He runs into Jordan there, and meets Gatsby for the first time. Gatsby privately tells Jordan a story she describes as the most "amazing thing." After going to lunch with Gatsby and a shady business partner of Gatsby's named Meyer Wolfsheim, Nick meets with Jordan and learns the "amazing" story: Gatsby met and fell in love with Daisy before World War I, and bought his West Egg mansion just to be near her and impress her. At Gatsby's request, Nick arranges a meeting between Gatsby and Daisy. The two soon rediscover their love.
Daisy invites Nick and Gatsby to lunch with her, Tom, and Jordan. During the lunch, Tom realizes Daisy and Gatsby are having an affair. He insists they all go to New York City. As soon as they gather at the Plaza Hotel, though, Tom and Gatsby get into an argument about Daisy. Gatsby tells Tom that Daisy never loved Tom and has only ever loved him. But Daisy can only admit that she loved them both, and Gatsby is stunned. Tom then reveals that Gatsby made his fortune by bootlegging alcohol and other illegal means. Tom then dismissively tells Daisy to go home with Gatsby, since he knows Gatsby won't "bother" her anymore. They leave in Gatsby's car, while Tom, Nick, and Jordan follow sometime later.
As they drive home, Tom, Nick, and Jordan come upon an accident: Myrtle has been hit and killed by a car. Tom realizes that it must have been Gatsby's car that struck Myrtle, and he curses Gatsby as a coward for driving off. But Nick learns from Gatsby later that night that Daisy was actually behind the wheel.
George Wilson, distraught, is convinced that the driver of the car yellow car that hit Myrtle is also her lover. While at work that day, Nick fights on the phone with Jordan. In the afternoon, Nick has a kind of premonition and finds Gatsby shot to death in his pool. Wilson's dead body is a few yards away. Nick organizes a funeral, but none of the people who were supposedly Gatsby's friends come. Only Gatsby's father and one other man attend.
Nick and Jordan end their relationship. Nick runs into Tom soon after, and learns that Tom told Wilson that Gatsby had run over Myrtle. Nick doesn't tell Tom that Daisy was at the wheel. Disgusted with the corrupt emptiness of life on the East Coast, Nick moves back to Minnesota. But the night before he leaves he walks down to Gatsby's beach and looks out over Long Island Sound. He thinks about Gatsby, and compares him to the first settlers to America. Like Gatsby, Nick says, all people must move forward with their arms outstretched toward the future, like boats traveling upstream against the current of the past.