Babbitt is set in the modern Midwestern city of Zenith. George F. Babbitt, a 46- year-old real estate broker, enjoys all the modern conveniences available to a prosperous middle-class businessman, yet he is dissatisfied with his life. When the novel opens, Babbitt has begun to regularly indulge in fantasies about a fairy girl who makes him feel like a gallant youth. Babbitt's family consists of his three children, Verona, Ted, and Tinka, and his dowdy, devoted wife, Myra.
Babbitt's closest friend Paul Riesling is even more dissatisfied with his life. He is also more vocal about it. Although he dreamed of becoming a professional violinist in his youth, Riesling became mired in the life of the average middle-class businessman of his generation. His wife, Zilla, is equally unsatisfied with the monotonous, conventional routine of Zenith, but she vents her frustrations by constantly nagging Paul. Riesling has often spoken of divorcing his wife, but, like Babbitt's frequent declarations that he is going to quit smoking, he never follows through.
Riesling and Babbitt try to ameliorate their dissatisfaction by taking a vacation in Maine together, but their enjoyment at their newfound freedom is short-lived. They eventually have to return to their lives as middle-aged married men. Both men experience a growing impulse to rebel against social conventions. When Babbitt discovers that Riesling is having an affair, he preaches the value of maintaining one's good social standing in the community. Riesling retorts that his life is miserable, so he doesn't feel guilty for seeking a little comfort in the arms of another woman. Soon thereafter, Riesling and Zilla have another argument; Riesling snaps, shoots his wife, and subsequently receives a sentence of three years in the state penitentiary.
Babbitt is devastated by the loss of Riesling's steadying presence in his life. His own desire for rebellion comes to the surface when he realizes that he wants his fairy girl in the flesh. When the attractive widow, Tanis Judique, enters his life, Babbitt thinks he has found his fairy girl and begins an affair. At the same time, Babbitt becomes more critical of the conservative opinions of his friends. When the threat of a general strike hangs over Zenith, Babbitt ventures to support some of the claims of the strikers, shocking and alienating his social set. While Myra is away nursing her sick sister, Babbitt stays out late, drinking and partying with Tanis' bohemian friends.
Babbitt's friends do not fail to take notice of his rebellion. They attempt to coax him back into their inner circle, but Babbitt remains defiant. Upon her return to Zenith, Myra becomes suspicious of Babbitt's activities. When he finally admits to her that he is having an affair, he convinces her that it is her fault. However, Babbitt becomes disillusioned with Tanis when he realizes that in many ways, her life is just as conventional as his. Meanwhile, Babbitt's friends try to bully him into returning to his old ways. When Babbitt refuses to conform, they shun him, and his business begins to suffer.
When Myra falls seriously ill with appendicitis, Babbitt realizes that it is too late to become a rebel. He once again becomes a devoted husband and deeply regrets the pain he has caused his wife. Babbitt's friends offer their support during the crisis. Babbitt gratefully accepts the chance to resume his old life and quickly regains his respectable social status.
Meanwhile, when Ted shocks everyone by eloping with Eunice Littlefield, Babbitt takes him aside to speak with him privately. Although he wants Ted to go to college, Babbitt accepts that Ted himself wants to drop out and work as a mechanic. Babbitt explains to his son that he never did anything he wanted to do with his life. Therefore, he urges Ted to resist the heavy pressure to conform to the expectations of others. Babbitt acknowledges that it is too late for him to rebel, but Ted still has a chance to achieve happiness on his own terms.
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