On a foggy London night in 1887, Irene Forsyte, wife of the wealthy Soames Forsyte, rushes to a hospital to be at the side of Philip Bosinney, who has been run over by a speeding carriage.  Philip dies from his injuries, and Irene tries to comfort his fiancée, June Forsyte, who angrily blames Irene for his death.  June refuses to listen to Irene's explanation, but Young Jolyon Forsyte, Soames's cousin and June's father, understands her grief and recalls the time, seven years earlier, when Irene was first introduced to his snobbish family.

On the night of Old Jolyon Forsyte's eightieth birthday celebration, his rigid nephew Soames announces that he intends to marry Irene, a piano teacher from a lower class.  The Forsytes react with shock and displeasure at the announcement and all but shun Irene, but she later finds her sole family ally in Jolyon, an artist and the black sheep of the family.  Jolyon empathizes with Irene's poor rapport with the family, as he has been ostracized from it and denied permission to visit his daughter.

Irene soon realizes that her relationship with Soames is doomed, but when she tries to break off the engagement, Soames refuses to abide by her wishes and instead buys a large house for them.  In time, Irene resigns herself to a loveless marriage with Soames, and the Forsyte family eventually comes to accept her.  Irene also builds a friendship with June, who takes Irene with her as a chaperon on her date with her new beau, Philip Bossiney, a young, charismatic architect.

By the time of Irene and Soames's second wedding anniversary, Irene and Philip have fallen in love, and Soames has become increasingly tortured by his marriage.  In an attempt to improve their relationship, Soames buys a country property and hires Philip to design an elaborate house for them.  Always insistent upon receiving value for money spent, Soames becomes increasingly annoyed with Philip's delays and extra expenditures over the next months.

Meanwhile, although Irene has thwarted Philip's attempt to steal her away from Soames by telling him that she will not leave her husband, June soon suspects that Philip is in love with someone else.  When June later tells Irene that she will kill herself if Philip has been unfaithful, Irene persuades Philip not to tell June that he is no longer in love with her.  Philip promises this to Irene in exchange for her promise to meet him at his studio.  Just prior to Philip and Irene's planned rendezvous, though, June arrives at the empty studio and finds a sketch of Irene with a romantic inscription by Philip.

Devastated, June flees before Philip and Irene arrive, and then takes vengeance by sending a note to Soames about his wife's affair.  After trying once again to end her affair with Philip, Irene returns home only to be met with the wrath of her husband.  During their quarrel, when Irene confesses her love for Philip, Soames vows to drive Philip out of the city and out of his profession, then strikes his wife.  Soames later summons Philip to his home to present him with a lawsuit, and when Philip tries to make a hasty departure, he is run over and killed by a speeding carriage.

When Irene learns of the tragedy, she rushes to the hospital to see Philip.  Jolyon concludes his recollection of the events leading up to Philip's death, and then invites Irene to live in Paris with him.  Time passes, and when Irene, now married to Jolyon, sees the distraught Soames trying in vain to purchase a portrait of her in a gallery, she takes pity on him and persuades Jolyon to allow it to be sold to him, saying that they are so rich, while he is so poor.