On the edge of Cincinnati, in 1873 just after the end of the Civil War, there is a house numbered 124 that is haunted by the presence of a dead child. A former slave named Sethe has lived in the house, with its ghost, for 18 years. Sethe lives at 124 with her daughter Denver. Her mother-in-law, Baby Suggs, died eight years previously after languishing for years with exhaustion and seeming overwhelming sadness. And her two sons, Howard and Buglar, ran away from the haunted home just before Baby Suggs’ death.
Paul D, a former slave who used to work on the same plantation, called Sweet Home, as Sethe, arrives at 124 and moves in, making a kind of family with Denver and Sethe. Paul D awakens painful memories for Sethe and Denver is jealous of the attention and affection that Sethe gives to him. But just as Denver is getting used to the new familial arrangement, a strange woman appears at the house. She calls herself Beloved and says that she doesn’t know who she is or where she is from.
Beloved asks Sethe many questions about her past and somehow seems to know about things only Sethe knew, such as about a pair of earrings Sethe received as a gift from the wife of her former master. Denver loves having Beloved around the house and eagerly tells her about the miracle of her own birth: Sethe escaped from Sweet Home while pregnant with Denver and almost died of hunger and exhaustion while trying to make it to Ohio. But a white woman named Amy Denver found Sethe, cared for her, and helped her get to the Ohio River, where she gave birth to Denver. Sethe named Denver after the kind white woman.
Paul D recalls his experience working on a chain gang. He and the other slaves eventually escaped together and had their chains cut by a group of Cherokee. Paul D wandered north and stayed with a kind woman in Delaware for some time, but he was unable to settle. He felt an urge to wander and did so for years before coming to 124.
Missing Baby Suggs, Sethe takes Beloved and Denver to the clearing in the woods where Baby Suggs used to have spiritual gatherings before she fell into her exhausted state. Sethe wishes that Baby Suggs were there to rub her neck and suddenly she feels other-worldly fingers massaging her neck. But then the fingers begin to choke her until they finally let go. Denver thinks that Beloved is somehow behind the choking, but Beloved denies it.
Beloved gradually and mysterious forces Paul D out of the house by making him restless, so that he ends up sleeping outside in the cold house. When he is sleeping outside in the cold house one night, she persuades him to sleep with her and stirs up his painful memories. Beloved tells Denver that she wants Paul D out of 124.
The novel moves back in time to follow Baby Suggs as she waits for Sethe and her son Halle (Sethe’s husband). Sethe has snuck her children out of Sweet Home and sent them ahead to 124, and she and Halle are supposed to escape together and come to the house. Halle never arrives, but Sethe does, and Baby Suggs is happy to have at least Sethe and her children reunited. She hosts a grand celebration for the neighboring community and her meager stores of food miraculously furnish a huge feast for ninety people. After the celebration, she feels uneasy, and realizes that she has offended the community with an excessive display of joy and pride. She senses that something bad is coming as a consequence.
Soon after the celebration, four horsemen come to 124: Schoolteacher (who became the owner of Sweet Home after the kinder original master died), his nephew, a slave catcher, and a sheriff. They have come to take Sethe and her children back to Sweet Home to work as slaves. The offended community does not warn Sethe or Baby Suggs, and when Sethe sees Schoolteacher coming, she gathers her children and runs to a shed. When the four horsemen find her, she has killed one child with a saw and is ready to kill her other children. Schoolteacher decides that she is crazy and not worth bringing back to work. The sheriff takes Sethe off to jail.
Back in the present, a former slave named Stamp Paid (who helped Sethe escape to 124 eighteen years ago) tells Paul D about Sethe’s killing her own child. Paul D confronts Sethe about it, and then leaves 124. Feeling guilty for causing Paul D to leave Sethe, Stamp Paid goes to 124 to talk to Sethe. But she does not come to the door. Stamp Paid hears strange voices from the house and sees Beloved through a window.
Within the house, Beloved causes Sethe to remember more and more of her painful past. The novel follows Sethe’s stream of consciousness as Sethe maintains that her killing her child was an act of love. Sethe believes that Beloved is the returned spirit of her dead child. The novel then follows the thoughts of Denver and Beloved. In a series of vivid but fragmented recollections, Beloved remembers being taken on a ship from Africa to the United States, the "middle passage" of the Atlantic slave trade.
Sethe begins to get weaker and weaker, falling under the sway of Beloved, whose every whim Sethe obeys. Denver ventures out of the house in search of work, to try to get food and provide for the household. She goes to the house of the Bodwins, who once helped Baby Suggs settle at 124, and tells their maid Janey about Beloved and the situation at 124. The community rallies together to supply food to 124.
As news spreads of Beloved’s strange presence at 124, a group of women join together to rescue Sethe and Denver from her. They gather around 124 and break into song, in a kind of exorcism. Mr. Bodwin approaches the house and Sethe mistakes him for Schoolteacher. Crazed, she tries to attack him but is restrained by Denver and other women. Beloved disappears.
After Beloved’s departure, 124 seems to become a normal household. Sethe has mostly lost her mind, but Denver is working and learning, hoping one day to attend college. Paul D returns to 124 and promises to always care for Sethe. The inhabitants of 124 and the surrounding community gradually forget about Beloved entirely, even those who saw and talked to her.