Pip is an orphan living in southeast England with his foul-tempered sister, Mrs. Joe, and her gentle husband, Joe Gargery, the village blacksmith. On Christmas Eve, Pip encounters an escaped convict in a leg-iron who scares Pip into stealing food and a metal file for him. Pip steals the food and file from his sister's pantry and Joe's blacksmith shop. The next day, Pip and Joe see soldiers capture the convict on the marshes where he wrestles bitterly with another escaped convict. The convict Pip helped protects Pip by confessing to the theft of the food and file, and Pip's involvement in the theft goes undiscovered.
Soon after, Pip is invited to start visiting wealthy Miss Havisham and her snobby adopted daughter, Estella, at Satis House. Miss Havisham was abandoned by her fiancée twenty years prior and seeks revenge on men by raising Estella to mercilessly break hearts. Estella's disdain for Pip's "commonness" inspires Pip's dissatisfaction with life as an apprentice blacksmith. He grows infatuated with Estella and assesses himself by her standards long after his Satis House visits come to an end.
Pip is apprenticed to Joe and grows increasingly despondent at his low status, seeking to elevate himself through independent study. When Mrs. Joe is brain damaged by the blows of an intruder at the forge, Pip suspects Orlick, Joe's cruel journeyman helper. Biddy moves in to run the household and becomes Pip's confidante, trying in vain to help Pip get over Estella.
One night, Mr. Jaggers tells Pip that he has an anonymous patron who wishes Pip to be trained as a gentleman. Pip assumes that this patron is Miss Havisham and that Estella is secretly betrothed to him. Unsympathetic to Joe and Biddy's sadness at losing him, Pip snobbishly parades his new status and goes to study with Matthew Pocket. Pip lives part time with Matthew's sweet-tempered son Herbert Pocket in London, where the two become fast friends. Pip's study mates are Startop and Bentley Drummle, the foul-tempered heir to a baronetcy who becomes Pip's nemesis when he pursues Estella, now an elegant lady. Pip also befriends Wemmick, Mr. Jaggers' clerk, who is stoic and proper in the office and warm and friendly outside of it. Pip spends extravagantly and puts on airs, alienating Joe on Joe's trip to London. Pip wishes Joe were more refined and fears association with him will jeopardize his own social status. He doesn't return to the forge until he hears Mrs. Joe has died. Even then, his visit is brief.
Back in London, Pip enlists Wemmick's help to invest secretly in Herbert's career, a gesture Pip considers the best result of his wealth, or "expectations." One night, Pip's patron finally reveals himself: he is Provis, the convict Pip helped on the marshes who has saved up a fortune while in exile and sailed back to England illegally just to see Pip. Pip is appalled by Provis's manners and devastated to realize Estella can't possibly be betrothed to him. When he confronts Miss Havisham, she admits she led Pip on regarding Estelle simply to make her selfish relatives jealous, and that Estella will be married to Bentley Drummle. When heartbroken Pip professes his love for her, Miss Havisham realizes her error in depriving Estella of a heart. She pleads for Pip's forgiveness, which Pip readily grants. Back in London a few days later, Pip realizes that Estella is the daughter of Provis and Mr. Jaggers' maid Molly.
Provis' rival on the marshes was Compeyson, Miss Havisham's devious former fiancée. Compeyson is looking for Provis in London and Pip plans to get Provis out of England by boat. Before they escape, Orlick manages to lure Pip to the village marshes and tries to kill him, but Herbert intervenes. Pip nearly succeeds in escaping with Provis but Compeyson stops them, then drowns, wrestling with Provis in the water. Provis is arrested and found guilty of escaping illegally from the penal colony of New South Wales, but dies from illness before his execution.
Pip falls ill. Joe nurses him and pays his debts. Healthy again, Pip returns to the village hoping to marry Biddy only to stumble upon her happy wedding with Joe. Pip goes abroad with Herbert to be a merchant. When he returns eleven years later, he finds an spitting image of himself in Joe and Biddy's son Pip II and runs into Estella on the razed site of Satis House. Suffering has made Estella grow a heart and she and Pip walk off together, never to part again.