The main character of the story is a young brahman (a member of the upper Indian caste) named Siddhardha. He is raised in wealth and love but still feels he lacks something inside of him. Siddhartha and his best friend Govinda decide to go for a quest for Atman. Atman is something incomprehensible, the sense of life and the eternal essence that is in every human being and in all living beings altogether.
Siddhartha decides to start his path with the Samanas - wandering beggars whose ascetic life and refusal of any material goods ascends them above the mortal world. Siddhartha sleeps almost naked on the ground, begs for food or eats anything he can find in the forest. He tries to eliminate his old self, to strip himself of his personality and see what will be left for it shall be the initial Atman.
Siddhartha and Govinda spend three years with Samanas to achieve enlightenment but none of them succeeds. Samanas think that the young men aren’t persistent enough, but Siddhartha starts to think that they are fine and the whole way they chose is wrong. He still agrees to make a pilgrimage to Gotama Buddha. Govinda is shocked and fascinated with the teaching of Gotama and pleads his friend to listen him, saying that they finally reached the man who will guide them to the Atman. But Siddhartha, though he agrees that Gotama Buddha is incredibly wise and is as close to transcendence as a man can be, still wants to find his own way.
Siddhartha asks Gotama about the contradiction in his teachings. Gotama urges his apprentices to accept the unity with all the world, but the Samanas purposefully divide them from the big part of the world that consists of mortal joys. Gotama has no answer, so Siddhartha doesn’t accept Gotama as a teacher and leaves Govinda wishing him best of luck on his way.
Siddhartha believes that it is impossible to become a Buddha, yielding to someone’s influence or teaching. If the Atman is hidden inside every living being, every living being has its own unique way to achieve it, based on its experience. Therefore he decides to go and gather his experience, hoping that once he will be wise enough to become Buddha.
After leaving Gotama, Siddhartha for some time just explores the world around him, immersed in its amazing beauty. In his journey he arrives to a large city and meets a girl named Kamala there. Kamala is a high-class courtesan pleasing the city aristocrats. Trying to unite himself with the part of the world he rejected before, Siddhartha asks Kamala to take him as an apprentice and teach him the art of love. Kamala gently refuses, saying that to become her apprentice he needs good clothes and lots of money. But she doesn’t reject him outright, giving to the young man some tips about finding his place in the material world. Kamala says that such an intelligent and educated young man will easily earn fame and fortune as a trader. Siddhartha thanks her and follows her advice.
Siddhartha starts to work as an assistant for a wealthy trader Kamaswami, thoroughly learning the mastery of business from him. He is an excellent student and soon he is promoted from the assistant to trader and later starts his own business. Kamala, who now sees that he is able to pay for her services, becomes his lover and teaches him everything he wants to know about love.
Siddhartha becomes more and more wealthy, now diving deeply into the material world. He gambles, drinks, has sex and buys luxury - but still doesn’t understand why all the people are so concerned with all that things. He even calls such people children who run over the brightest toys in the yard, not understanding that all they do is merely a play. Siddhartha himself doesn’t feel sorrow about his losses and isn’t filled with joy when he wins.
But the event that changed his life was insignificant at first glance. Once in the morning he sees that Kamala’s rare and precious songbird lies dead at the bottom of its cage. Siddhartha suddenly realises that the material world is the same cage he is trapped in and if he doesn’t do something right now, he will eventually die as the songbird without even coming closer to Atman. So in one day he leaves everything: his prosperous business empire, his mansion and even Kamala who lived with him as a wife. He tries to track his own steps to the point where he lost his way.
Siddhartha returns to the river that he crossed after leaving Gotama. He meets the ferryman there - the same who helped him to cross the river for the first time and said to young Siddhartha that he expected him back. The young man is now seriously ill, he has a fever, he hallucinates and barely walks. Siddhartha decides to end it all at once and commit suicide by drowning in the river, but he is saved by the ferryman and nursed back to health. Siddhartha realises that he is caught in Samsara’s wheel - the cycle of eternal life and death, reincarnation in different worlds, defined by karma achieved in the previous lives.
When he is fully healed and finally awakes from his deep, deathlike sleep, Siddhartha sees his former friend Govinda near him. Govinda now is a Buddhist monk, he was passing by the ferryman’s hut and saw a sick man inside it. He stayed and helped to care for the man, healing him and protecting him from the snakes, immediately recognising Siddhartha. Govinda says that Siddhartha has changed a lot since they were both Samanas and looks now like a rich man. But Siddhartha replies that he is neither Samana nor a rich man and now is trying to become someone completely different.
Govinda soon continues his journey and Siddhartha stays, immersing himself in a deep and long meditation. He feels that despite all his efforts he is still at the very beginning of his journey. He looks at the ferryman named Vasudeva and sees that he is completely content with his life, living in peace with all the world. He wants to achieve the same serenity and asks Vasudeva to let him stay and work together. Vasudeva agrees and Siddhartha becomes the second ferryman.
They work together for years, until Siddhartha sees a wealthy lady and a boy waiting for a ferry. It appears to be Kamala who goes to visit Gotama Buddha with her son, hurrying to complete her pilgrimage while Gotama (who is old and sick) is still alive. But before they cross the river, a snake bites Kamala and the womanis dying near the ferrymen hut. Siddhartha and Vasudeva try to treat the wound but the poison still slowly kills Kamala. Before her death, she tells Siddhartha that the boy she travels with is his eleven-year-old son. Siddhartha fled from her when she was already pregnant with their child.
Siddhartha is now left with the son he has never known before. He does his best to comfort the boy and to teach him what he knows about his job, but the boy was grown up in a very different environment. He misses his native city and the luxury of his mansion and wants to return back. Vasudeva tells Siddhartha that he should let the boy go, that his son doesn’t belong here, but Siddhartha can’t force himself to lose his son. The tension between father and son grows and one morning Siddhartha wakes up to see the boy stealing his and Vasudeva’s money and running back to the city. Siddhartha chases him to the very gates of the city but then he realises that he won’t find him in a such a crowded place.
Heartbroken he returns back to Vasudeva and the old ferryman tells him to listen to the river and let it console him. Siddhartha sits near the river and tries to move on after the loss of his son. He listens to the river for many years more and gradually he starts to understand what it tells him. Just as the water flows to the ocean, evaporates from it and falls as a rain to gather to streams and rivers again, as cyclic is human existence. Life and death, joy and sorrow, gains and losses are the different sides of the same eternal cycle that wraps all the Universe. There is no good and evil, no right or wrong path. Everything is necessary and everything fits its place in the world.
When Siddhartha tells Vasudeva about his discovery, the old ferryman says that now his apprentice is ready to work alone and finally he can retire with a light heart. Vasudeva says that Siddhartha has learned all the lessons that the river could teach him and understood the meaning of life. Than the old man leaves his hut to Siddhartha and goes to the forests. It is heavily implied that he reaches Nirvana later.
Siddhartha lives as a ferryman for a long time. He finds peace with himself and the world around him, following his path. The story ends when he meets Govinda. His former friend is an elderly monk who still follows the path of Gotama but haven’t reached enlightenment still. He sees the old wise man sitting in the hut near the river - this time he doesn’t recognise Siddhartha - and feels the same peace and serenity Siddhartha himself felt when he met Vasudeva. Govinda asks the old man for advice hoping that the wise man will share his knowledge and help him, Govinda, to finish his path. But Siddhartha (who recognised Govinda from the very beginning) answers that no one can teach another living being the ways to reach enlightenment: everyone has their own way and their own personal experience is the only thing that matters.
Now it becomes obvious who of the two friends made the right choice years ago. But Siddhartha, who has finished his journey already and now understands the Atman, asks Govinda to kiss him in the forehead. Govinda obeys and in that very moment all Siddhartha’s knowledge about the endless cycle of everything in the world is transmitted to him. Now the journey of both is completed as the friends now understand the very essence of things - the Atman.