The principal setting is a communal farm called Blithedale (i.e., "Happy Valley"), a would-be modern Arcadia along the lines of the anti-capitalist ideals of Charles Fourier, yet is nonetheless destroyed by the self-interested behavior of some of its members. Among those members are: Hollingsworth, a monomaniacal philanthropist and confirmed misogynist who intends to turn Blithedale into a colony for the reformation of criminals; Zenobia, a passionate feminist of exotic origin who ironically finds Hollingsworth's misogyny irresistible; Priscilla, a young and impecunious seamstress from the city; and Miles Coverdale, the unreliable narrator, a minor poet and dandy given to acts of voyeurism.

An intense friendship develops among these four during the spring and summer, but begins to disintegrate as autumn approaches and ultimately ends in tragedy.