Ordinary People is set in Lake Forest, Illinois, during the 1970s. The action focuses on the Jarrett family--Calvin and Beth and their son Conrad. Before the action of the book begins, there was a second Jarrett son--Buck--who was killed in a boating accident over a year before the novel begins. After the death of Buck, Conrad became deeply troubled, blaming himself. He tried to commit suicide by slashing his wrists; his attempt failed when Calvin found him, before he died, in the bathtub. After the attempt, Conrad was hospitalized. He went through therapy and befriended Karen, a girl his age who had also tried to kill herself.

The action of the book begins a month after Conrad is released from the hospital. While he is physically cured, he is by no means emotionally cured, and at the request of his father, he begins to see a psychiatrist, Dr. Berger. He tells Berger that he doesn't think highly of psychiatry, but he wants Berger to help him gain more control over others so that he can make his father stop worrying about him. Conrad goes back to school, where he has experienced a severe academic downturn ever since Buck's death. He is a junior, and he is a member of the swimming team. However, he feels he is becoming alienated from even some of his best friends, such as Joe Lazenby, and ends up becoming more and more isolated. He decides to quit the swimming team, although he does not tell his parents about the decision until a month later. He spends his time instead in the library after school. He even goes out for a Coke with his old friend Karen at one point, and he sees that she is doing much better. As the year progresses, he becomes interested in a girl at school named Jeannine Pratt, who is new to Lake Forest. They go out a couple of times before they start to date seriously towards the end of the year. Meanwhile, Conrad continues to see Berger, although it is unclear whether he is making much progress. The novel focuses on his family life, and we see that Conrad is becoming increasingly alienated from his mother, who is not interested in pampering him or dwelling on the past. His relationship with his father is somewhat strained as well.

During the winter, Conrad goes to see a swim meet on a whim, and afterwards he gets into a fist fight with an old friend who has begun to treat him cruelly. In some ways, it is unclear whether Conrad is really getting better. His father grows increasingly concerned about him. That spring, he goes to stay with his grandparents while his parents go on vacation to Houston. There, he spends lots of time with Jeannine. One night, however, he reads in the newspaper that his friend Karen has committed suicide. He is suddenly thrown into shock, and he spends the whole night in a dream-like trance thinking about his time with Karen, his own suicide attempt, and the death of his brother. He goes out walking at 2 am to think some more, and he is stopped by a police officer and told to return home. He falls back into a dream at home and then wakes up at dawn. He immediately calls Berger and requests to meet with him. In Berger's office, Conrad has a breakdown and admits that he blames himself for the death of Buck. Berger tells him to stop blaming himself and to stop trying to fill Buck's shoes; Conrad needs to allow himself to feel more even when he feels bad, and he needs to be himself for a change. After this breakdown and release of emotion, Conrad begins to heal substantially, enjoying a great relationship with Jeannine. At the end of the novel, he has moved to Evanston with his family, and in the Epilogue we see him rebuilding his old friendship with Lazenby.

The story of Conrad is told opposite the story of his father, Calvin, who spends most of his time in the novel worrying about Conrad. Calvin is a tax attorney who runs a small firm with his partner, Ray Hanley. Most of the chapters devoted to Calvin depict him by himself, thinking about the past and his son and wife. It is clear from the beginning that Calvin and Beth have serious communication problems. Essentially, Calvin wants to talk through the past with his family; he believes that talking is the way to heal. Beth, however, abhors Calvin's philosophy: she only wants to move on and leave the past behind. She also constantly criticizes her husband for pampering Conrad. She thinks Conrad ought to be left to grow up on his own without parents breathing down his neck all the time. Indeed, Beth thinks that she managed to heal her own hurts on her own, and she does not understand why everyone else can't do the same. Calvin and Beth attend parties together and spend lots of time with their own friends, and we see them in numerous situations. As the novel progresses, however, the communication rift between Beth and Calvin only widens. They fight more and more about how to treat Conrad. They also fight about vacations. Beth feels that the family must get away from Illinois for Christmas, but Calvin makes them stay in Lake Forest in hopes that they can talk through their problems as a family. In the spring, they take a golfing trip to Houston together; however, things blow up when Beth again rails on Calvin for his obsession with Conrad. When they return to Illinois, they hardly speak to one another until Beth announces to Calvin that she is leaving for Europe. While they do not talk about divorce, their differences seem irrevocable by the end of the novel. After Beth leaves, however, Conrad and Calvin really come together for the first time in the novel, saying that they love each other and showing an interest in developing a better relationship. Calvin and Conrad move to Evanston.