1798. Seventeen-year old Cathy Morland passes the time imagining herself the heroine of the gothic novels she loves to read. Mr and Mrs Allen, a rich childless couple, ask Cathy to accompany them during their stay in Bath. Mrs Allen and Cathy make their first entrance into Bath society at the Upper Rooms and informally meet Henry Tilney. Next morning, Cathy's brother, James, arrives at Mrs Allen's apartments with a new friend, John Thorpe, the son of an old school friend of Mrs Allen's. Mrs Allen is overjoyed to renew her acquaintance with Mrs Thorpe, and Cathy befriends her daughter Isabella. Cathy accompanies John on a ride in his open carriage; it becomes clear during the journey that he assumes she is the Allens' heir. Cathy decides not to ride with John again when she discovers that Mrs Allen considers inappropriate behaviour.

The next day, after a enthusiastic conversation about the gothic horror novels, Isabella informs Cathy that she and James are engaged, but that they need his parents' consent. The Thorpe siblings and Cathy visit a spa, where Cathy meets Eleanor, Henry Tilney's sister, who invites Cathy to go walking with her. Overhearing their conversation, John warns his sister that she is being snubbed. On leaving the spa, Cathy excuses herself from riding with John, having promised to walk with Eleanor. John informs her that he has told Eleanor that Cathy has a previous engagement with him. Furious, Cathy runs to the Tilney's apartments and explains the situation, overheard by Henry and by Eleanor's widowed father, General Tilney. Cathy, Henry and Eleanor walk in the country and discuss gothic novels.

Isabella receives news that James' parents have consented to their engagement, with the proviso that they wait two years. She discovers that they will only receive an income of £400 per year and tries to hide her disappointment. Later at the ball, she dances with the eldest Tilney brother, Frederick (a dragoon captain), and flirts with him. Cathy refuses to dance with John and, enraged, he gives some undisclosed information to General Tilney.

Cathy agrees to visit the Tilneys at their ancestral home, which she is delighted to discover is the gothic Northanger Abbey. Unbeknown to her, Frederick stays behind to pursue Isabella. Cathy draws comparisons between the settings of the gothic novels and the Abbey, and fantasies that she is a victimised heroine terrorised by General Tilney. That night, during a storm, she overhears Eleanor crying, and she finds what she suspects are lovers' tryst notes in an old trunk (they are later whisked away by the maid, who tells her they are 'laundry bills'). The next morning, the General stops Cathy from looking around the abbey until he can accompany her and instead Cathy and Eleanor stroll around the gardens. Discussion turns to Mrs Tilney's sudden death and Cathy expresses an interest in seeing her chamber. They are prevented from entering by the sudden appearance of the General. In her letters to Isabella, Cathy romanticises the situation and concludes that there is a mystery to unravel.

The next day, the maid, helping Cathy prepare for riding, tells her that the General made his wife's life a misery. Shocked, Cathy feigns illness to excuse herself from riding, and visits Mrs Tilney's chamber, where she is discovered by Henry. When she suggests that Mrs Tilney died from unnatural means, a furious Henry blames her unfounded imaginings on the lurid novel she is reading. Later, a letter arrives from James indicating that Isabella has broken their engagement and hopes to marry Frederick. Eleanor tells Cathy that the General would never allow Frederick to marry Isabella because she has no fortune. Eleanor adds that she was forbidden to marry the man she loved because his family was ruined.

Later, the General discovers that Cathy has no fortune and, enraged, sends her home in disgrace. He tells Henry that John Thorpe has deliberately misled him in order to ruin the Tilney family, and that Cathy is a fortune seeker. Henry defends Cathy's honour, and tells him that she never claimed to be rich; they argue and then part. Henry rides to the Morlands' home and asks Cathy to marry him, and she accepts.