Northanger Abbey follows seventeen-year-old Gothic novel aficionado Catherine Morland and family friends Mr. and Mrs. Allen as they visit Bath, England. Catherine is in Bath for the first time. There she meets her friends such as Isabella Thorpe, and goes to balls. Catherine finds herself pursued by Isabella's brother, the rather rough-mannered, slovenly John Thorpe, and by her real love interest, Henry Tilney. She also becomes friends with Eleanor Tilney, Henry's younger sister. Henry captivates her with his view on novels and his knowledge of history and the world. General Tilney (Henry and Eleanor's father) invites Catherine to visit their estate, Northanger Abbey, which, from her reading of Ann Radcliffe's gothic novel The Mysteries of Udolpho, she expects to be dark, ancient and full of Gothic horrors and fantastical mystery.

Seventeen year old Catherine Morland is one of ten children of a country clergyman. Although a tomboy in her childhood, by the age of 17 she is "in training for a heroine," and is excessively fond of reading Gothic novels of which Ann Radcliffe's Mysteries of Udolpho is a favourite.

Catherine is invited by her wealthier neighbours in Fullerton, the Allens, to accompany them to visit the resort town of Bath and partake in the winter season of balls, theatre and other social delights. Although initially the excitement of Bath is dampened by her lack of acquaintances, she is soon introduced to a clever young gentleman named Henry Tilney, with whom she dances and converses. Much to her disappointment, Catherine does not see Mr. Tilney again soon after their first meeting, though her attention is quickly engaged when Mrs. Allen meets Mrs. Thorpe, an old school friend of hers, whose son is also acquainted with Catherine’s older brother, James. Catherine quickly becomes friends with the eldest Ms. Thorpe, Isabella, a vivacious and flirtatious young woman.

Catherine’s brother James and Isabella’s brother John soon arrive in Bath. While Isabella and James are spending time together, Catherine becomes acquainted with John, a vain and crude young gentleman who incessantly tells fantastical stories about himself.

Mr. Tilney returns to Bath, accompanied by his younger sister, Eleanor Tilney, who is a sweet, elegant and respectable young lady. Catherine also meets their father, the imposing General Tilney.

The Thorpes are not very happy about Catherine's friendship with the Tilneys, as they (correctly as it happens) perceive Henry as a rival for Catherine's affections. Catherine tries to maintain her friendships with both the Thorpes and the Tilneys, though John Thorpe continually tries to sabotage her relationship with the Tilneys. This leads to several misunderstandings, which upset Catherine and put her in the awkward position of explaining herself to the Tilneys.

Isabella and James become engaged. Mr Morland (senior) approves the match and offers James a country parson's living worth a modest sum, which he will be able to have in two years. The couple must therefore wait that long to marry. Isabella is dissatisfied, having believed the Morlands to be quite wealthy, but she pretends to Catherine that she is merely dissatisfied that they must wait so long to be married. James departs to purchase a ring, and John accompanies him after coyly suggesting marriage to the confused Catherine. Isabella immediately begins to flirt with Captain Tilney, the older brother to Henry. Innocent Catherine cannot understand her friend's behavior; but Henry understands it all too well, as he knows his brother's character and habits. The flirtation continues even when James returns, much to James' embarrassment and distress.

The Tilneys invite Catherine to stay with them for a few weeks at their home, Northanger Abbey. Catherine, in accordance with her novel reading, expects the Abbey to be exotic and frightening. Henry teases her about this, as it turns out that Northanger Abbey is pleasant and decidedly un-Gothic. However, there is a mysterious suite of rooms that no one ever goes into: Catherine learns that they were Mrs. Tilney's, who died nine years earlier. Catherine decides that, since General Tilney does not now seem to be affected by the loss of his wife, he may have murdered her or even imprisoned her in her chamber.

Catherine persuades Eleanor to show her Mrs. Tilney's rooms, but General Tilney suddenly appears. Catherine flees, sure that she will be punished. Later, Catherine sneaks back to Mrs. Tilney's rooms, to discover that her overactive imagination has once again led her astray, as nothing is strange or distressing in the rooms at all. Unfortunately, Henry passes in the corridor and questions her as to what she is doing. On hearing her (reluctantly admitted) suspicions, Henry angrily informs her that his father loved his wife in his own way and was truly upset by her death. He goes on to criticize Catherine for entertaining such wild ideas. She leaves crying, fearing that she has lost Henry’s entire regard.

Realizing how foolish she had been, Catherine comes to understand that, though novels may be delightful, their content does not relate to everyday life. Henry does not stay angry with her but lets her get over her shameful thoughts and actions in her own time and does not mention them to her again.