The novel opens in 1972 with a group of state troopers unearthing a skeleton buried in a well in Pottstown, Pennsylvania. With the skeleton, they find a mezuzah—that is, a Jewish token hung on doorways—with the words "Home of the Greatest Dancer in the World" engraved in Hebrew. They question Malachi, an old dancer and one of the neighborhood's last remaining Jews. However, a hurricane sweeps through town, destroying all evidence in the murder case—and by the time the storm has cleared, Malachi has disappeared. 

Forty-seven years earlier, a Jewish immigrant named Moshe Ludlow owns the All-American Dance Hall and Theater and lives on Chicken Hill, a neighborhood mostly populated by Pottstown's Black and Jewish communities. Moshe has recently married Chona, the daughter of the local Rabbi and owner of the Heaven & Earth Grocery Store. Nate Timblin, a Black man also from Chicken Hill, works for Moshe and is one of the man's closest friends. Moshe's theater has recently staged a widely popular klezmer performance where Moshe meets Malachi, a great dancer who disappears for years after the performance comes to a close. Despite backlash, Chona and Moshe soon decide to integrate the theater and open their doors to Black performers and audiences. 

Most Jews have begun to leave Chicken Hill, but Chona, a strong-willed woman steadfast in her beliefs, is resolute that she and Moshe will remain in their apartment above the grocery store. As the years pass, Chona regularly speaks out about Jewish issues and reviles the Ku Klux Klan, along with Doc Roberts, the local physician, for his involvement with it. After twelve years of marriage, Chona falls ill and Chicken Hill's Black community, particularly Nate and his wife Addie, flock to her aid.

One day, Addie's nephew, Dodo, goes missing. Nate, who deeply cares for the boy, finds him nearby and learns that Dodo's mother has died. Dodo is deaf and the state has decided to send someone to take Dodo away to a special school. Meanwhile Malachi, the dancer, appears, bringing Moshe friendship and solace. Remarkably, Chona soon recovers. To thank Malachi for his constant support, Moshe gives Malachi the mezuzah from the novel's opening, though Malachi insists that Chona keep it. Malachi disappears once more for several years and in the interim, Moshe and Chona agree to hide Dodo in their home while the state is still looking for him. Chona also enlists the help of her neighbor and childhood friend, Bernice Davis. Chona, unable to have children of her own, begins to care deeply for Dodo and shows him immense kindness.

Meanwhile, Doc Roberts, a member of the Klan and a vicious antisemite, is still resentful of Chona for rejecting his advances when they were children. With prompting from his cousin, Doc agrees to look for Dodo and write a doctor's note that would secure the boy's transfer to a special school. One day, Doc arrives at the Heaven & Earth Grocery Store and argues with Chona, causing her to have a seizure and collapse to the floor where he begins to sexually assault her. Dodo attacks Doc, eventually drawing attention from the police who chase him until he jumps off the roof, severely injuring himself and earning him a trip to Pennhurst State Hospital for the Insane and Feeble-Minded. 

As Part 2 of the novel begins, Dodo suffers at Pennhurst where he meets Monkey Pants, a boy with cerebral palsy. The two boys quickly grow close, providing solace and friendship for one another and even developing a special language allowing them to communicate, despite their disabilities. Back in Pottstown, Chona is in a coma in the hospital, and Moshe and Addie rarely leave her side. Nate struggles with Dodo's imprisonment. His mood grows dark and angry, drawing concern from Fatty Davis, a Chicken Hill resident who has heard stories about Nate's troubled, violent past in prison, along with the rumor that his real name is Nate Love. A plan to break Dodo out of Pennhurst slowly begins to develop. 

In Pottstown, a bullfrog is discovered in the shul's mikvah, a Jewish ritual bath, leading to a discussion among local Jews about the shul's water supply. The city refuses to supply the shul with water due to animosity between Chona and city councilman Gus Plitzka. As a result, the shul has been tapping into a local well for water without permission, a situation further complicated by the fact that the Plitzka family now owns Clover Dairy, the land where the well is located. With antisemitism running rampant, the discovery of the shul's unlawful water supply could spark serious trouble for the community's Jewish population. Isaac, Moshe's wealthy cousin in Philadelphia, comes to town due to Chona's deteriorating state. He learns of the water supply issue and begins poking around. Back at the hospital, Moshe sits by Chona's side as she finally passes away.

As Part 3 begins, readers learn of a neighborhood called Hemlock Row, populated by the Lowgod and Love families. The Lowgods, unlike Chicken Hill's Black community, have no desire to be at all associated with the white man's world. Fatty takes another Chicken Hill local, Paper Millison, to visit Miggy, a Lowgod from Hemlock Row. Paper seeks Miggy's help with the plan to break Dodo out of Pennhurst. Miggy tells Paper about a dangerous Lowgod working at Pennhurst named Son of Man, as well as Bullis, who can get them in contact. 

Back in Pottstown, everyone is preparing for an annual Memorial Day celebration, much to Gus Plitzka's dismay. Gus has always hated the event, but his mood is further soured by threats from Nig Rosen, a gangster from whom Gus borrowed money to purchase the Clover Dairy. He has also suffered an injury to his toe, giving him an unfortunate limp. He has the injury examined by Doc Roberts, who is struggling after his assault of Chona. He fears that someone will discover the truth of what he did to her, especially because he now possesses a mezuzah which he accidentally snatched off her neck during the assault. Back at Pennhurst, Dodo and Monkey Pants continue to bond, and Dodo finally meets Son of Man, who Monkey Pants warns is dangerous. 

Moshe heavily mourns Chona's death and, with the help of Nate and Addie, decides to close the Heaven & Earth Grocery Store. Isaac arrives from Philadelphia, bringing Malachi, who has come to comfort Moshe and relocate to the States. His presence provides great solace for Moshe. Isaac questions Nate and Addie about Dodo, implying that he wants to be involved with the escape plan, but Nate brushes him off. Isaac presumably enlists Bernice's help, who approaches her brother, Fatty, about a job reconnecting water pipes. She gives him a bible hiding $900 and a list of instructions, which Fatty hastily ignores. 

Meanwhile Miggy, who works at Pennhurst, meets with Nate, Addie, Paper, and other Chicken Hill residents involved with the escape plan. She provides crucial details about Pennhurst and informs them about a rarely used series of tunnels beneath the institution. She tells them about the dangerous Son of Man and Duck Boy, the child he once tortured. Duck Boy presumably escaped with the Egg Man's help via the tunnels the Egg Man uses to make deliveries. Miggy also mentions that Son of Man knows Nate. 

In Philadelphia, Pottstown local and Jewish shoemaker Marvin Skrupskelis visits Isaac, seeking the man's help with Doc Roberts. Marvin wants to expose Doc Roberts for assaulting Chona, and Plitzka for getting his water supply for free. However, Isaac would rather focus on saving the shul and rescuing Dodo. He asks Marv to arrange for two people to be on the train that delivers supplies to Pennhurst so there’s someone to help Dodo once he has escaped. Isaac cryptically remarks that the water issue will be resolved.

Back in Pottstown, under instructions from Bernice, Fatty plans to secretly disconnect and reconnect some of the city's water pipes at a well by the Clover Dairy. He enlists his friend Big Soap, formally Enzo Carissimi, to help with the job that night. The plan to rescue Dodo is scheduled for that night as well. Fatty fills Nate in on the water job, who reasons out that Isaac is behind the operation. Fatty admits that he thinks some of the money from the bible was meant for railroad workers, causing Nate to take $400 for the workers meant to help Dodo escape. Back at Pennhurst, Dodo and Monkey Pants strengthen their bond. However, one night, Son of Man comes in and assaults Dodo, launching Monkey Pants into a seizure. The next morning, he is dead.

Unbeknownst to the Egg Man, Bullis, Nate obscures himself in Bullis's cart and arrives at Pennhurst, where he stabs Son of Man and demands that Bullis take him to the ward where Dodo is being kept. In Pottstown, Gus is once again threatened by Rosen's men and he and Doc prepare for the Memorial parade, donning their Revolutionary-era costumes. In a choice that alters his life forever, Doc puts on a British red coat instead of the American blue coat Gus offers him. 

Fatty and Soap complete the job reconnecting water pipes, presumably for the shul, and accidentally flood the well in the process. They leave to find materials they can use to cover up the manhole they destroyed during the job. While they're gone, Doc drunkenly stumbles by on his way home from the parade, wearing the red coat that Gus was supposed to wear and walking with his polio-induced limp, prompting Henry Lit, one of Rosen's men, to mistake Doc for Gus. He knocks out Doc, who falls into the well, wearing Chona's mezuzah around his neck. Fatty and Soap return and cover up the well without noticing Doc's unconscious body floating in the water.

In the novel's epilogue, Nate helps Dodo escape to South Carolina where he grows up on a farm, paid for by Isaac. Back in Pottstown, Moshe and Isaac create a camp called "Camp Chona" for disabled children. Dodo lives out his life on the farm, adopting the name Nate Love II and having a family of his own, largely forgetting everything about his past in Pennsylvania. However, he never forgets Chona or Monkey Pants and the kindness they showed him. As his loved ones surround him on his deathbed, he uses his final breath to mutter an ode to Monkey Pants.