Juan Crisóstomo Ibarra y Magsalin, also known as Ibarra, is a mestizo Filipino who has spent the last seven years studying in Europe. His friend, Captain Tiago, a well-known figure, throws a reunion meal for him when he returns to the Philippines. Ibarra has been in Europe for so long that he is unaware of the current situation there. Ibarra is shocked when Father Dámaso, whom he believed to be his father's friend, mistreats him during dinner.

Señor Guevara, another family friend, follows Ibarra as he makes his way home from the meal and informs him that Father Dámaso was involved in the death of Ibarra's father, who passed away in prison following a campaign of defamation against him. Rafael Ibarra was imprisoned and subjected to accusations of rebellion and heresy after he accidentally murdered a guy who had beaten a small kid. Father Dámaso had accused the elder Ibarra of not attending confession. Guevara died in prison before he could be released, despite his best efforts to clear his record. Though astonished, the younger Ibarra is not sure what to do. He goes to see Maria Clara, his former sweetheart, but Ibarra is put off when she brings up Ibarra's family.

Ibarra attempts to emulate his father's peaceful ways rather than seek retribution. He intends to start a public school to support his hometown after speaking with a schoolmaster who knew his father. However, the schoolmaster cautions him that Father Dámaso interferes with the educational process by forcing him to beat the pupils and preventing them from learning Spanish. Town officials approve when Ibarra presents the school concept to them under the guise of wanting to collaborate with them.

In the meantime, Crispín and Basilio, two young boys, support their poor mother Sisa, who is beaten by their father, by working as sextons. When Crispín is falsely accused of theft, the brothers must work even more. Crispín is brutally assaulted when he objects, but Basilio manages to get away. When he comes back the following day, he is unable to locate his brother. Sisa searches the region for both of her sons, going crazy while she does so.

In search of peace of mind, Ibarra visits his father's grave. He is horrified to learn that Father Dámaso, the town's curate, ordered his father's body to be taken out and purportedly placed in a Chinese cemetery.

Ibarra and the administrators intend to celebrate the new school during the town's festivities, intending to bless it following Father Dámaso's lecture. Ibarra is warned of a conspiracy to kill him by an enigmatic man named Elías during the sermon. Ibarra and his pals had gone on an earlier expedition with Elías as the boatman, but after the trip, Ibarra found out he was sought.

Ibarra hosts a supper that evening, and Father Dámaso extends an invitation to himself. He explicitly disparages Ibarra's father as well as native Filipinos. He strikes Father Dámaso, but María Clara stops him before he can kill him.

Ibarra is excommunicated, and after her feckless father calls off her marriage to Ibarra, María Clara becomes unwell and subsequently reengages to another man. In the meantime, Ibarra's excommunication is lifted by the Captain General, the highest ranking Spanish officer in the book, which infuriates the clergy. Father Salvi, who is in love with María Clara, conspires with Lucas, the brother of a man killed in the plot to kill Ibarra at the festival, to frame Ibarra for a rebellion. He organizes people who have grievances against the colonial government and claims that Ibarra is in charge of the uprising. Ibarra continues to work at the school. Father Salvi warns everyone just before the incident occurs, saying he heard about it in confession.

After being found guilty based on a letter he wrote to María Clara before departing for Europe years ago, Ibarra is sent to prison. Once more, Elías comes to his aid, releasing him from prison and bringing him to María Clara. She claims that she sent Father Salvi the letter that resulted in Ibarra's conviction because he blackmailed her, knowing that Father Dámaso was her biological father and threatening to disclose this information. She sincerely apologizes to Ibarra.

Ibarra and Elías row off, but they soon discover that another boat is pursuing them and will soon catch them. To mislead their pursuers, who mistakenly believe he is Ibarra and attempt to shoot him as the actual Ibarra flees, Elías leaps off the boat. They never see his body, but they seem to kill him.

María Clara threatens to kill herself if she is denied entry to a convent and informs Father Dámaso that she cannot wed Linares, the man she is now engaged to. She finds it unbearable to consider getting married to someone else after reading in the newspaper that Ibarra is dead. Reluctantly, Father Dámaso concurs.

Basilio leaves the cabin where he has been staying with an adoptive family on Christmas Eve and searches for his mother, Sisa. She doesn't recognize him and flees when he finds her. When she finally recognizes him, he catches her and faints, and she passes away from shock. Elías shows in, informs Basilio that he is going to die, and requests that Basilio place his and Sisa's bodies on a funeral pyre. "I die without seeing dawn's light shining on my country…You, who will see it, welcome it for me…don't forget those who fell during the nighttime," he continues.