Oliver Twist begins in a workhouse in 1830s England, in an unnamed village, where a young woman, revealed to be Oliver's mother, gives birth to her son and promptly dies. The boy, lucky to survive, is raised until the age of nine in a "farm" for young orphaned children, and then is sent to the local workhouse again, where he labors for a time, until his innocent request for more food so angers the house's board and beadle, Mr. Bumble, that the workhouse attempts to foist Oliver off as an apprentice to some worker in the villager. Oliver is eventually given over to a coffin-maker named Sowerberry. Oliver works as a "mute" mourner for Sowerberry, and must sleep at night among the coffins. After a fight with Noah, another of Sowerberry's apprentices, over Oliver's unwed mother (whom Noah insults), Oliver runs away to London, to make his fortune.
Near London, Oliver meets a well-dressed young boy who introduces himself as the Artful Dodger, a thief under the employ of a local crime boss named Fagin. The Dodger takes Oliver to Fagin, who promises to help Oliver but really holds him hostage, and forces him to go on a thieving mission with the Dodger and Bates, another young criminal. Bates and Dodger try to steal the handkerchief of an old man, who notices Oliver (an innocent onlooker), and believes him to be the thief. Oliver is caught and hauled to jail, only to be released into the old man Brownlow's company after Brownlow sees that Oliver had nothing to do with the crime. Brownlow nurses Oliver for a time and vows to educate him properly. But after sending Oliver out to return some books and money to a bookseller, Brownlow is shocked to find that Oliver does not return—Oliver has been picked up by Nancy, an associate of Fagin's, and taken back to the criminal gang.
The remainder of the novel comprises Brownlow's attempts to find Oliver, and Oliver's attempts to escape Fagin, his criminal associate Sikes, and the other boys. Fagin orders Oliver to accompany Sikes and another thief named Toby Crackit on a house-breaking, in a country village, that goes awry; Oliver is shot in the arm in the attempt, by a servant named Giles of the Maylie house (the house being broken into); Oliver nearly dies, but walks back to the house the next morning and is nursed back to health by Rose, Mrs. Maylie, and a local doctor named Lorsborne. Lorsborne later takes Oliver into London to find Brownlow, but they discover Brownlow has gone to visit the West Indies. Oliver is crestfallen, but is happy nonetheless with the Maylies, and is educated by an old man in the Maylies' village. Later, on a trip into London, Rose is visited by Nancy, who wishes to come clean about her involvement in Oliver's oppression, and Oliver finds that Brownlow is back in the city, having returned from the West Indies.
Meanwhile, Mrs. Corney, mistress of the workhouse, receives a package from a dying woman named Old Sally, which Sally in turn received from Oliver's mother upon her death. The package contains material indicating Oliver's family history, which is of interest to a friend and shadowy associate of Fagin's named Monks. Nancy meets with Rose and Brownlow in secret in London, to discuss what she has overheard, from Fagin and Monks, regarding Oliver's parentage; Noah, sent to spy on Nancy, overhears this conversation, and reports it to Fagin. Fagin tells Sikes, misleadingly, that Nancy has "peached" on the whole gang (even though Nancy refused to incriminate Fagin or Sikes to Brownlow), and Sikes, in a fit of rage, kills Nancy, then goes on the lam with his dog.
Brownlow realizes that he recognized Oliver as resembling the picture of a woman in his parlor, and also recognized a man he comes to realize is Monks. Brownlow pieces together the mystery of Oliver's parentage: Oliver's father is also Monks' father, and Monks' mother defrauded Oliver's mother, an unwed woman named Agnes, of the inheritance Oliver's father, Edward, intended to leave to Oliver and Agnes. Monks wishes to destroy these facts of Oliver's parentage in order to keep all the inheritance for himself. But Brownlow confronts Monks with these facts, and Monks agrees, finally, to sign an affidavit admitting his part in the conspiracy to defraud Oliver.
Meanwhile, the members of Fagin's gang are all caught: Noah; Charlotte, his partner; the Dodger; and Fagin himself. Sikes dies, by accident, attempting to escape a mob that has come to kill him following Nancy's death. Brownlow manages to secure half of Oliver's inheritance for Oliver, and gives the other half to Monks, who spends it in the New World on criminal activity. Rose Maylie, long in love with her cousin Harry, eventually marries him, after Harry purposefully lowers his social station to correspond with Rose's; Rose was said to be of a blighted family, and in the novel's final surprise, this "blight" is revealed: Rose's sister was Agnes, meaning that Rose is Oliver's aunt.
At the novel's end, Oliver is restored to his rightful lineage and is adopted by Brownlow. The pair live in the country with Harry, who has become a parson, and Rose, along with Losborne and Mrs. Maylie. Oliver can, at last, be educated in the tranquility and manner he deserves, as the son of a gentleman.