Moving between present and past, and narrated alternately in third-person and first-person, The Guide tells the life story of Raju. Born to a modest shopkeeper and his wife in the (fictional) town of Malgudi, India, Raju grows up at a time of great changes: most notable among them the construction of the railway line that comes to town in his childhood. The railway changes the family’s fortunes and Raju’s life forever. As a result of a second shop that Raju’s father opens in the railway station, the family prospers, and, after Raju’s father’s sudden death, Raju takes over the rail station shop to continue his father’s enterprise.
However, Raju doesn’t remain a shopkeeper for long. Soon, he takes to showing the many visitors who arrive at the railway station the sites of Malgudi. In re-inventing himself as a tourist guide, Raju often resorts to exaggerations and fabricated tales to impress his customers. His reputation as a guide grows to such an extent that he comes to be known as “Railway Raju,” sought out by tourists from far and wide.
Raju meets his match in Marco Polo, a serious, studious academic of ancient civilizations who arrives in Malgudi to research the cave paintings and temples scattered around the town’s surroundings. He engages Raju’s services as a tourist guide to navigate these many sites. Raju’s impulsive dislike of Marco Polo—who is haughty and domineering—is further reinforced when he meets his young, beautiful wife Rosie, who arrives in the town shortly after her husband. Raju is immediately taken by Rosie, who, in spite of the foreign name she goes by, is an Indian woman trained in the art of Indian classical dance. When Raju takes Rosie to visit a snake charmer and watches her as she imitates the snake’s movements in a fleeting dance, he is thunderstruck: she is, he realizes, the greatest dancer he has ever seen.
Seeking to get closer to Rosie, Raju devotes himself to her and her husband’s care. Soon, it becomes clear that all is not well in the marriage. The couple is liable to bouts of quarrelling, which come to a head at Mempi Hills, an area outside of Malgudi in which cave paintings are located that Marco, accompanied by his wife and guided by Raju, goes to examine. At Peak House, where the party lodges during the expedition to Mempi Hills, Raju learns that Rosie is dissatisfied with her husband—primarily because he has banned her from pursuing her passion, the art of classical dance that has been practiced by members of her family for generations. Taking advantage of Rosie’s dissatisfaction, Raju flatters and compliments her, praising her dancing abilities, and soon, they strike up an affair behind Marco’s back.
With Raju’s encouragement, Rosie again tries to talk to her husband about commencing a career in classical dance, but she is rebuffed, and inadvertently reveals that she is having an affair with Raju; a man, she tells her husband, who appreciates her talents. This leads to a crisis between husband and wife. When Raju goes up to visit Marco and Rosie at Peak House, however, neither Rosie nor Marco reveal exactly what is going on, and instead, Rosie commands Raju to leave them alone.
Raju returns to Malgudi, where, depressed by Rosie’s absence, he has a difficult time picking up his old life—the shop at the railway station, and his work as a tourist guide. One day, a few weeks after his trip to Peak House, Rosie appears with her luggage at the house that he shares with his mother. Raju’s mother, a traditional woman, is surprised by the appearance of the single young woman, but accepts her presence in the house for the time being. Raju learns from Rosie that Marco has left her.
Raju is thrilled by Rosie’s reappearance, and is encouraging and supportive of her reawakened devotion to dance: she takes to practicing everyday in his house. However, trouble soon begins to brew with his mother, who has heard rumors that Rosie is a married woman, and has realized, moreover, that Rosie is a dancer who belongs to a lower caste. Financial troubles also escalate: Raju’s creditor, the sait, a merchant from whom he buys wholesale supplies for the railway shop, begins pursuing Raju in the courts to pay back his debts. Raju’s negligence of the railway shop also leads to the loss of the business. Problems further escalate when Raju’s uncle, his mother’s brother, appears in the house, insults Raju and Rosie, and, along with his sister, demands that Rosie leave. Raju defiantly takes Rosie’s side, and in response his mother packs up her things and departs with her brother.
Throughout, Rosie, unaware of the extent of Raju’s financial straits, continues practicing her art. One day, she declares that she is ready to perform publicly, and, after settling with Raju on the more traditional and captivating name of “Nalini” as an appropriate moniker for her public debut, Raju sets to work arranging her first public performance.
From the moment of her debut, Rosie is a huge success. Raju, who takes credit for orchestrating her astronomical rise to fame, re-invents himself once again as the “manager” of the alluring and captivating Nalini. Nalini is asked for everywhere, and Raju’s role in managing Rosie’s career transforms him into a man of wealth and influence. Still pursued by the sait for the debts he owes for the railway shop, and finding that his father’s home is now under mortgage to the sait, Raju and Rosie move to a larger, more luxurious house, where Raju takes to hosting important visitors and hobnobbing with politicians, bankers and rich merchants—all men who seek access to Nalini through Raju.
Keeping Rosie to a relentless schedule of engagements and performances, Raju nonetheless starts growing jealous of the artist friends that she likes to spend time with, and seeks to limit her contact with them. He does this, in spite of sensing that a dangerous dissatisfaction is developing in Rosie. One day, he receives an unexpected parcel in the mail. It is the book that Marco, Rosie’s husband, has published on his research on the cave paintings in Malgudi. Raju hides the book from Rosie. Nonetheless, news of the publication reaches her: she becomes excited when she reads about Marco’s book in a magazine. Not only that, but Rosie quarrels with Raju when she discovers that Marco’s book has been sent to them, but that Raju has hidden it from her.
Increasingly jealous of Rosie’s preoccupation with her husband, Raju also hides a letter which arrives for Rosie from Marco’s lawyers shortly after the arrival of the book. The letter concerns a box of valuable jewelry that Marco wants to release to Rosie. Instead of sharing the letter with Rosie, Raju forges her signature on the form sent by the lawyers, hoping to acquire the box of jewelry without Rosie’s knowledge.
Before long, Raju’s deceit is exposed: a police superintendent shows up at one of Rosie’s performances with a warrant for Raju’s arrest for forgery. Raju is forced to disclose all to Rosie. She is devastated, particularly upon discovering that, in spite of her tireless dancing, Raju has been reckless with the immense wealth they’ve accumulated through her engagements. They are now so poor that even meeting the cost of Raju’s legal expenses is a burden. She takes to dancing again to pay for Raju’s expenses, which include fees for an expensive lawyer that she hires to defend Raju in the court case against him. The lawyer, however, fails to get Raju off. Raju is convicted of forgery and sentenced to two years in prison. Although he comes across reports of her continuing rise to stardom in the newspapers he reads in jail, Raju never meets Rosie again.
Uncertain of where to take himself after his release from prison, Raju sits on the banks of a river near a small village. A stranger approaches him, and stares up at him reverently. Soon the stranger, a villager by the name of Velan, confesses that he is having trouble with a younger half-sister who refuses to accept the marriage match he has arranged for her. Although Raju is disconcerted by Velan’s unwarranted respect for him, he tries to help. After Velan brings his sister to visit Raju, the sister accepts the match arranged for her by her brother. Velan and his family credit this success to Raju.
Raju’s success in pacifying Velan’s rebellious half-sister leads the villagers to believe in his powers as a holy man, or spiritual guide. Raju, considering that he has nowhere to go and that the offerings of food brought to him by the villagers on a daily basis provide him with free nourishment, decides to play the role that the villagers have given him. He grows his beard and takes up residence in the temple by the river, all in a bid to play the role of “holy man” more convincingly. Each day, a congregation of villagers arrive to listen to him discourse on various topics. Although he often feels like an imposter, Raju continues with the charade.
When a severe drought afflicts the village, Raju is unwittingly drawn into undertaking a two-week fast on behalf of the villagers to bring about rains. Realizing the enormity of the sacrifice that the villagers expect him to undertake, and afraid for himself, Raju finally discloses his full life story to Velan, including his history of deceit and imprisonment. Raju hopes that Velan will see that he is just an ordinary man after all, devoid of the powers which the villagers have invested him with. However, after hearing Raju’s story, Velan’s view of him remains unchanged. He speaks and looks at Raju with the same reverence and respect he had on that first day they met by the river bank.
Astonished, but also moved, that Velan should still continue to respect him as the “swami” in spite of his shameful past, Raju decides to undertake the fast in earnest, as a way of repaying Velan’s—and the villager’s—faith in him. News of the swami’s fast spreads far and wide—people come to the village by the thousands to meet the heroic holy man, and journalists and news people arrive to report on the developments. On the final day of the fast, Raju is so weak that that he is unable to descend to the river on his own to hold vigil, as he has done every day throughout the fast. With Velan’s help, however, he musters the energy to reach the depleted river. On the brink of unconsciousness, he looks to the horizon, and tells Velan that he feels rain coming over the hills.