Tilly Dunnage, a dressmaker, decides to return to Dungatar, the small town where she grew up and where her mother, Molly, still lives. Tilly arrives in Dungatar late one night. She is greeted by Sergeant Farrat, Dungatar’s policeman, who recognizes Tilly and gives her a lift to Molly’s house, which is on top of the Hill overlooking the town. Sergeant Farrat is excited to learn the Tilly is a dressmaker—he secretly adores fashion and makes himself women’s clothes to wear in private. Tilly finds that Molly’s house is extremely messy and that Molly is mentally ill and physically weak. Over the next few weeks, Tilly nurses Molly and cleans up the house, creating a workspace for herself where she can make clothes. At the bottom of the Hill, near the Dungatar tip, the McSwiney family notice the activity at Molly’s house. Teddy McSwiney, the McSwineys’ eldest son, takes a special interest in Tilly.
Meanwhile, in the town, the Dungatar residents are shocked by Tilly’s return and they gossip frantically about her. Evan Pettyman, the wealthy and lecherous town councilor, is particularly dismayed to see Tilly back. Just after Tilly’s arrival, William Beaumont (who attended school with Tilly) also returns to the town. Gertrude Pratt, whose parents, Alvin and Muriel, run Pratt’s General Store, notices William’s return and attempts to flirt with him when she sees him outside the shop. Muriel calls her away, however, and Gertrude finds Elsbeth Beaumont (William’s mother) in the shop and waiting to be served. Elsbeth is a snobbish woman who pretends to be very rich to hide the fact that she is deeply in debt. Elsbeth senses Gertrude’s interest in William and tries to put her off. After Elsbeth leaves the shop, Muriel tells Gertrude that there is a footballer’s dance on Saturday night, which William is bound to attend.
As Tilly fixes up Molly’s house, Teddy McSwiney begins to visit and to befriend Molly. He brings Tilly an old wheelchair that Molly can use and he cooks for them. Teddy finally persuades Tilly to come to the footballer’s dance with him, and Tilly makes a spectacular dress from cheap fabric and to wear to the event. At the dance, the townspeople refuse to speak to Tilly; they glare at her and gossip about her all night. Tilly knows that the townspeople will not forgive her for what happened when she was a child. She remembers how the boys at school, especially a boy named Stewart Pettyman (Evan Pettyman’s son), used to pick on Tilly, beat her up, and even sexually assault her. One afternoon, Stewart ran at Tilly to headbutt her in the stomach, but Tilly stepped out of the way at the last moment. Stewart ran headfirst into the wall, broke his neck, and died. Tilly was taken away from Dungatar after that and sent to school elsewhere. Presently, although the townspeople snub Tilly, they do admire her dress. Meanwhile, Gertrude meets William at the dance and invites him to go for a walk with her. They almost have sex, and William decides that he must marry Gertrude—much to Elsbeth’s dismay.
A few weeks later, Teddy persuades Tilly to come out into Dungatar again, to attend the horse races with him. Tilly goes, and again, she wears a dress she made herself that draws the attention of the crowd. Gertrude approaches Tilly and asks her if she will make a wedding dress for her. Tilly agrees and makes a magnificent gown that Gertrude wears on her wedding day. The townspeople are astounded by Gertrude’s dress, and after this, many of the women visit Tilly and ask her to make outfits for them. Soon, Tilly has a bustling dressmaking business that she runs from Molly’s house. Gertrude’s marriage to William makes her extremely arrogant. She married him because he is a Beaumont—the most respectable family in town. When she learns that the Beaumont’s are secretly poor, she begins borrowing money from Alvin to maintain their lavish lifestyle. Elsbeth and Gertrude even set up a Dungatar Ladies Social Club to inject some culture into Dungatar. They decide to host a fundraiser and a ball, and Tilly is inundated with demand for her dresses, although the townspeople still avoid her and gossip about her in private. Tilly hires Sergeant Farrat to help her with the workload, and he and Tilly become friends over their shared love of fashion.
Tilly does not plan to go to the ball herself, but at the last minute, Teddy McSwiney convinces her to go as his date. The pair has fallen in love with each other. Tilly wears a beautiful red gown, and she and Teddy go down to the ballroom together. However, when Tilly looks at the seating plan, she sees that her name has been scrubbed off the list. When she tries to enter the ballroom, Evan Pettyman spits at her and Beula Harridene, a malicious gossip, slams the door on her and holds it shut. Tilly rushes to the park and sits on a bench by herself. Teddy comes to find her, and the couple goes back to his caravan and has sex. Tilly tells Teddy about her past, and Teddy proposes to her and says that he will take her and Molly away from Dungatar. The pair go to the silo by the railway to watch the sunrise together. Teddy tells Tilly that when he was a boy, he and his friends used to jump off the silo and into the wheat trucks below. Tilly begs Teddy not to jump, but Teddy insists—he wants to prove to her that he is not afraid and that he does not believe that Tilly is cursed by her past. He leaps into the truck, which he thinks is full of wheat. However, it is really full of sorghum, and Teddy suffocates to death. Tilly is heartbroken by Teddy’s death, and the townspeople blame her for what happened to Teddy (who was extremely popular in town). After he dies, there is no one to protect Tilly and Molly. Townspeople throw things at their house and spit at them in the street.
The Dungatar Ladies hire a new dressmaker, Elsbeth Beaumont’s cousin Una Pleasance, to make their clothes for their events. Una comes to stay in Dungatar and begins a romantic affair with Evan Pettyman. Una’s clothes are poorly-made compared to Tilly’s, however, and some of the Dungatar women secretly continue to buy from Tilly. Word of Tilly’s skills also spreads to the neighboring town of Winyerp, and the Winyerp Ladies Cultural Society come to visit her to have some clothes made. During their visit, Tilly suggests that the Ladies Societies should collaborate and put on plays for their upcoming cultural event. The Winyerp Ladies think this is a great idea and they suggest it to Elsbeth at the next meeting. Elsbeth agrees to this idea, but she gets a little worried when the Winyerp ladies say that there will be a prize for best costumes and that they will hire Tilly to dress them. Gertrude suddenly announces that Dungatar have already hired Tilly, and the Winyerp ladies are disappointed. Una is fired, and the Dungatar Ladies go to beg Tilly to make their costumes. Tilly agrees, but only if she is paid upfront. Ruth Dimm, who runs the post office, gives Tilly the money that the townspeople have given her to insure their houses and businesses. The Dungatar Ladies tell Tilly that they are going to perform Shakespeare’s Macbeth, and Gertrude shows Tilly a design for 17th-century Baroque costumes. Tilly knows these costumes are from the wrong time period for Shakespeare (who is from the 16th century) but she agrees to make them anyway.
One morning, Tilly has a dream about her baby, Pablo, who died before she came back to Dungatar. When Tilly wakes up and goes into the kitchen, Molly tells her that she had the same dream, and Tilly finally tells her mother all about her life before she came back to Dungatar. In Paris, Tilly had a dressmaking business, and she and her boyfriend, Ormond, had Pablo together. This all ended when Pablo died and Ormond left Tilly. After this, Tilly decided to come back to Dungatar. Molly explains that she was never told where Tilly went after Stewart Pettyman’s death. Tilly’s father, who Molly reveals is actually Evan Pettyman, hid Tilly’s whereabouts from Molly, and Molly gradually went mad with grief and loneliness. That afternoon, Molly suffers a stroke and dies. Tilly is heartbroken and she vows to take revenge on the Dungatar residents, who have always been cruel to her and refused to help her or Molly. Sergeant Farrat attends Molly’s funeral with Tilly, and they get drunk together that night. Tilly throws her radio out of the house—Molly hated popular music—and it strikes and gravely injures Beula Harridene, who is creeping about the garden spying on them. When Tilly finds out about this, she views it as revenge for Beula’s gossiping.
The next day, Tilly visits Evan’s wife, Marigold Pettyman—whom Evan habitually manipulates, drugs, and rapes—and she tells Marigold the truth about Evan. Evan has told Marigold that Stewart died falling out of a tree and has not told Marigold about his relation to Tilly or his many affairs. Marigold also realizes that Evan has spent all the money that she inherited from her father. Presently, Evan is away visiting Una in Melbourne. When he returns, Marigold drugs him using herbal potion that Tilly gave her. In his weakened state, Marigold murders him and then tries to kill herself.
As the Dungatar production of Macbeth approaches, Tilly continues to work on the costumes. Gertrude (the play’s director) begins to go mad with power, and the cast begin to hate her. Finally, on the day of the production, they sack Gertrude and she goes into a frenzy and is committed to the local asylum. The cast sets off for the theater in Winyerp. Sergeant Farrat (who has a role in the play) says that he will meet them there—but as he is about to leave, he notices that Tilly’s house is on fire. Tilly has poured gasoline on everything and she walks through Dungatar freeing all the animals. Sergeant Farrat rushes up the hill to try and stop her, but he is already too late: the fire rips through the town and burns everything to the ground.
Meanwhile, in Winyerp, the Dungatar cast are deeply embarrassed when Mona Beaumont, William’s sister, masturbates onstage during the play. The Dungatar cast is thrown out of the event. The group glumly rides back to Dungatar on the bus and they’re shocked to find that the town has burned down and that Tilly has taken their insurance money and left. Distraught, they notice that Elsbeth Beaumont’s house still stands, and they begin to make their way over the hill to seek her help.
