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Northanger Abbey is the coming-of-age story of a young woman named Catherine Morland. It is divided into two sections, Book I and Book II. The two Books differ significantly from each other in setting and, to a degree, in tone.

Book I begins when the Allens, family friends of the Morlands, offer to take Catherine with them to Bath, a resort for the wealthier members of British society. The 17-year-old Catherine eagerly accepts the Allens' invitation. Catherine is young and naïve. Her life has been relatively sheltered, so Bath is a new world for her. In Bath, Catherine is introduced to Henry Tilney, a young clergyman who impresses Catherine with his wit and pleasant conversation. Catherine quickly falls for Henry, but after their first meeting she does not see him again for some time. Mrs. Allen runs into an old acquaintance, Mrs. Thorpe, and her three young daughters, including Isabella, who is slightly older than Catherine. Catherine and Isabella are soon best friends. Isabella, superficial and fond of gossip, inducts Catherine into the social world of Bath, with all its balls, dances, shows, fashion, and its gossip.

Just when Catherine and Isabella have settled into a close friendship, they are met with the arrival of James Morland, Catherine's brother, and John Thorpe, Isabella's brother. James and John are friends at Oxford University. Isabella wastes no time in flirting with James, and soon it is obvious to everyone except Catherine that James and Isabella are in love. Taking a cue from James, John tries to woo Catherine, asking her to be his dance partner. But at a ball, Catherine sees Henry Tilney again and is more interested in Henry than in John. John's bragging and his arrogant nature put off Catherine.

Soon all of Isabella's time is taken up with James. Without Isabella to spend her time with and saddled with the unpleasant John Thorpe, Catherine decides to become friends with Eleanor Tilney, Henry's sister. Eleanor quickly sees that Catherine has feelings for Henry, but does not say anything. After rain seems to wash out her plans for a walk with Henry and Eleanor, Catherine is pressured by James and Isabella into riding with John, much to her dismay. On the way, she spots Henry and Eleanor walking toward her house for the planned walk. John refuses to stop, angering Catherine.

Catherine apologizes to Eleanor and Henry, and plans are made for another walk. John, Isabella, and James again intervene, pressuring Catherine into another outing. Catherine firmly refuses this time and joins Eleanor and Henry in a walk around Beechen Cliff. They discuss novels, and Catherine is delighted to find that Henry and Eleanor love books as much as she does. Catherine returns home to discover that James and Isabella have become engaged. She briefly meets with John, who is leaving Bath for several weeks. John leaves with the false impression that Catherine is in love with him, although Catherine does not realize this.

Book II begins with the arrival of Henry's older brother, Captain Frederick Tilney. Isabella quickly catches the eye of the captain and, dismayed by the discovery of James's modest income, begins to flirt with Frederick. Eleanor invites Catherine to visit the Tilney home in Northanger Abbey. The invitation is seconded by Eleanor's father, General Tilney. Catherine eagerly accepts the invitation, delighted at the prospect of visiting a real abbey and at seeing more of Henry. Before Catherine leaves, Isabella tells her that John is planning to propose to Catherine. Catherine tells Isabella to write him and tell him, with her apologies, that he is mistaken. Frederick appears and flirts with Isabella, who returns his attentions. Dismayed by this behavior, Catherine asks Henry to convince Frederick to leave Isabella alone. Henry refuses, knowing that Isabella is at least as guilty as the captain, but he tells Catherine that Frederick will probably leave Bath with his regiment soon anyway.

Catherine leaves with the Tilneys for Northanger Abbey. On the way, Catherine tells Henry how she imagines the Abbey to resemble the haunted ruins of the Gothic novels she loves. Henry, amused, responds by giving a hypothetical account of her first night at the Abbey, complete with mysterious chests, violent storms, and secret passages. Northanger Abbey turns out to be quite dull, having been fixed up by General Tilney. Due to her overactive imagination, Catherine entertains all sorts of frightening ideas about the place, each of which is thwarted. For instance, a strange bureau in Catherine's room turns out to contain nothing more mysterious than receipts. Catherine becomes intrigued by the death of Eleanor and Henry's mother years earlier. Her mind full of Gothic plots, Catherine suspects that General Tilney of murdering his wife. Catherine sneaks into the mother's old chamber and discovers nothing. She is caught by Henry, who guesses her thoughts and scolds her. Mortified and ashamed, Catherine quickly resumes her good behavior.

Catherine receives a letter from her brother telling her that his engagement to Isabella has been called off. Catherine thinks that Frederick forced himself between them, but Henry convinces her that it was as much Isabella's fault as Frederick's. Catherine visits Henry's house at Woodston. The General drops hints about Catherine marrying Henry. Catherine gets another letter, this time from Isabella, telling her that Frederick has left her, and asking Catherine to apologize to James for her. Angry at being manipulated, Catherine wishes she had never known Isabella. The General leaves on a business trip, and Henry goes back to Woodston for several days. The General then returns unexpectedly and tells Eleanor to send Catherine away the next morning. Though she is very embarrassed, Eleanor has no choice but to send Catherine to her home in Fullerton.

Catherine's family is irritated by the General's rudeness, but is glad to have her home. Catherine mopes around, despondent, until suddenly Henry arrives in Fullerton and proposes to her. Henry explains that his father's behavior was due to John Thorpe. In Bath, when John thought Catherine loved him, he had told General Tilney that Catherine was from a very wealthy family. When the General ran into John much later, after Isabella had told John about Catherine's true feelings, John had angrily told the General that the Morlands were almost poor. Mortified, the General had sent Catherine away, furious that his hopes for John to make a wealthy match were to be frustrated. Henry and Catherine decide to wait until the General gives his consent to their marriage. Within a few months, Eleanor marries a very wealthy and important man, which puts the General in a good mood. Once he is told of the true nature of the Morland's financial situation, which is moderate, he gives his consent, and the novel ends with the marriage of Henry and Catherine.

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