The story starts on a broken and dirty road near the small village of Weydon-Priors in the county of Wessex, England. The picture is very common for this place: a hay-trusser named Michael Henchard goes along the road with all his family - his wife Susan and daughter named Elizabeth-Jane - to find a job for himself. But the farmer they meet on the road tells them the bad news: there is no job and no house for them in Weydon-Priors. Disappointed, Michael tells the news to his family. When they see the furmity seller’s tent nearby, he asks the sellers to give them shelter. The seller is glad to accommodate the travellers and makes extra meals for them. But, alas, he carelessly adds some alcohol drinks to Michael’s meal, not knowing that the liquor makes the man extremely angry. He starts to complain about his miserable life, blaming his early marriage for ruining it. He goes as far as offering to sell his family on the auction to whoever gives the highest bid to him. He goes outside the tent and announces the auction. The people actually think it is a joke, believing that no husband will do such an awful thing to his wife and little daughter. But Susan, fed up with mistreatment, steps forward and says that she wants to be sold, because her previous master is unworthy of her and isn’t to her liking anymore. The audience is puzzled with such a turn, but suddenly a sailor who was passing by, stops to hear the noise of the crowd and goes to look. He sees Susan and immediately agrees to buy her and her daughter for five guineas - but not before he courteously asks if she is willing to go with him. Susan agrees and Michael agrees too, taking the money and going to sleep, glad that he got rid of his family that burdened him. Before she leaves, Susan throws her wedding ring at Michael, confirming that their marriage is over now. The shocked customers of the furmity trader leave, not knowing how to react to what they have just seen.
When Michael is sober and awake, he can’t realise, why he is alone now, and why is Susan’s wedding ring lying next to five guineas. Gradually, he remembers the events of the previous day. Still, Michael is too self-righteous to take the blame, claiming that Susan took his “joke” with auction too serious. But after rethinking the situation, Michael decides that his alcohol abuse has at least something to do with the awful situation that happened yesterday. So he makes a promise to abstain from any liquor for twenty-one years, because alcohol has never did him any good. After making this oath, Michael goes to search for his lost family. It is a complicated task, because the man can’t explain how he lost them - without revealing the whole horrible and humiliating thing with the auction. Finally he finds a trace of the three people resembling the sailor, Susan and Elizabeth-Jane, but only to learn that they have just emigrated overseas. Finally, Michael gives up and decides to start his life anew, heading to the other town of Wessex named Casterbridge.
Eighteen years pass. Susan and her daughter, now the young woman, return to the same village the story started, to Weydon-Priors. Now it is their turn to search for Michael. Susan seeks him, because her previous husband, the sailor named Newson, has died. Now she is hoping that Michael will support at least Elizabeth-Jane. The girl in her turn doesn’t know anything about her mother’s previous marriage, considering Newson her real father and Michael just a distant relative willing to help her mother. The family stops at the same tent of furmity seller (she is still there, on the very same place) and then they learn from her that Michael was there a year after the notorious auction and asked the seller to tell Susan (if she ever returns) that he is now living in Casterbridge. Susan and Elizabeth-Jane thanks the seller and leave for Casterbridge immediately.
What they see in the town shocks Susan. She didn’t expect Michael to become incredibly prosperous trader, who now has all the power and influence in Casterbridge and is even elected the mayor of the town. At the first night after their arrival, Susan listens that the whole town is gossiping around Michael’s business deals that end bad for him. Michael defends himself, but suddenly he gets another defender - a young and handsome man from Scotland named Donald Farfrae, gives some reasonable suggestion about turning the sprouted grain Michael now has into something usable. Farfrae is now the hero of the day and he enjoys the sudden glory, using it to flirt lightly with Elizabeth-Jane.
After that, while the girl is asleep, Susan goes to the secret meeting with Michael, explaining him the whole situation and asking for support for their daughter. Michael is glad to accept back Susan too. They come up with a plan to still keep their relationship secret from the girl and pretend to start them anew. Michael offers Susan to rent her a house in the town and start courting her for some time in a respectable way, so everything looks neat and acceptable for both townsfolk and Elizabeth-Jane. Susan agrees to the plan and after a couple of months Michael makes a proposal to her which Susan accepts. Michael “adopts” Elizabeth-Jane, hoping that sometimes he will be able to openly say to her that he is her biological father too. The things start to work out for Michael - even more so after he hires Farfrae as his general manager, confidant and consultant. Farfrae is incredibly charming and able to fascinate almost everyone in the town, so he is immediately loved by the population of Casterbridge. Elizabeth-Jane also is attracted to the young Scotsman. Michael considers Farfrae someone between his son, brother and the best friend and the only rival Donald has in all the town is Joshua Jopp, the man who hoped to get his position by himself.
The wealth of her (step)father makes Elizabeth-Jane even more beautiful. Michael is proud of her incredibly and finally asks Susan to legally give the girl his family name. Susan, to his surprise, is hesitating for some reason, but Michael can’t understand what the reason is. Farfrae becomes more and more interested in the young heiress, but she is too shy to answer to his advances. Moreover, the relationship between him and her father start to spoil. Farfrae becomes too popular, while Michael is blamed by the townsfolk for every failure. The last straw was the argument of Michael and Donald about the punishment of the worker who is always late, named Abel Whittle. After that, on the public celebration where Farfrae is again praised and Michael is criticized, Michael openly reminds Donald that his contract as a manager is coming to an end and won’t be renewed. Farfrae agrees and quits, opening his own shop in Casterbridge, selling the same corn and hay Michael does.
Soon Susan passes away. She leaves a letter for Michael, asking him not to open it before Elizabeth-Jane’s marriage. Michael agrees and puts the letter away. Feeling incredibly lonely and miserable after losing his only friend Farfrae, he finally confesses to Elizabeth-Jane, telling her about his previous marriage with Susan and claiming that she is his biological daughter. After some hesitations Elizabeth-Jane decides to believe him. After that, thinking that the issue is already settled, Michael opens Susan’s letter, thinking that it should tell Elizabeth-Jane about the same thing. But to his shock Susan wrote the complete opposite things. The letter revealed that Michael’s daughter has died and Susan named her second daughter from Newson after her. So this Elizabeth-Jane is his stepdaughter for real. This sudden discovery disappoints and angers the mayor and he involuntarily grows cold to Elizabeth-Jane - though he never finds the courage to tell her the new truth, understanding that the girl isn’t guilty.
Elizabeth-Jane is very confused and upset with such a change of heart, but she still tries to win Michael’s love by immersing herself in studies and trying to be a good enough daughter for him. She often visits her mother’s grave to weep about her uncaring father. Once Elizabeth-Jane sees a young, beautiful and seemingly wealthy woman sitting on the very same grave. Overwhelmed by emotions, the girl cries and tells everything to this stranger woman. This mysterious lady who named herself Miss Lucetta Templeman consoles Elizabeth-Jane and says that soon she will move to Casterbridge, so she wants a companion at her house. Elizabeth-Jane may fit. The girl agrees gladly and asks permission from Michael. He allows it, despite he doesn’t seem very pleased with this fact. As soon as Miss Lucetta moves into the town, Elizabeth-Jane leaves to her house.
The story gets even more tangled when Lucetta invites Michael to her place - making sure that Elizabeth-Jane is away on errands. It turns out that before Susan returned, Lucetta and Michael were secret lovers, when he was in Jersey, and they had an agreement to marry. But then Susan returned and Lucetta agreed to wait, understanding that Michael is now morally obliged to remarry the wife he mistreated long ago. Now Susan is dead and Lucette wants to return to Michael, this time officially. Soon Lucette hears a call at the door - but suddenly it isn’t Michael, it is Farfrae, who came to see Elizabeth-Jane who she still is attracted to. Lucette and Farfrae see each other and immediately fall for each other. Now Lucette isn’t interested in marrying Michael, ignoring and avoiding the confused man. Tired of waiting, Michael openly proposes to Lucette, but then realizes that he has a secret rival. Elizabeth-Jane who sees all the situation unwinding finally gives up any hope to marry Farfrae, seeing how much he is in love with Lucette.
The rivalry between the two men is now both on the business and personal field. Michael finally hires Joshua Jopp as his general manager with the only goal to get Farfrae out of business. But Michael makes another mistake, trusting a stranger weather-prophet and building his expectation from the harvest on them. The prophecy turns out to be false and Michael loses the money, while Farfrae, who prefers more scientific approach, only multiplies his wealth.
Nevertheless, Michael doesn’t lose his hope to marry Lucetta, winning her over Farfrae. When he is driven to the brink of despair, he blackmails Lucetta into marriage, promising to show Farfrae their previous love letters otherwise and disgrace her forever. Lucetta reluctantly agrees. Michael rejoices and returns home to prepare the wedding - but the next day he hears the trial of an old woman as a mayor. The old woman is the same furmity seller, the witness of all the story. Seeing Michael as her judge, she reveals all the story about the auction where Michael have sold his wife and daughter to the stranger. Horrified and disgusted, Lucetta elopes with Farfrae to Port-Bredy, sending Michael a letter that she did this afterwards.
In the meantime Michael’s business is falling apart. Everything that can go wrong goes wrong: his debtors fail to pay, his personnel is constantly making the wrong decisions and Michael is soon at the brink of bankruptcy. Farfrae uses this chance to buy the rest of Michael’s business and offers him the position of a manager in the business he used to own. Michael has no other choice than to accept this offer, but his feelings to Farfrae turn into sheer hatred: he is the next best candidate to become a mayor, he has Lucette and now he has his business. Michael impatiently waits until the term of his oath expires and he can drink again.
Afraid that Michael will hurt her (still) beloved Farfrae, Elizabeth-Jane tries to fix the relationships between everyone, but fails. Farfrae almost agree to give Michael his separate shop, but the idea fails. He would be also glad to leave Casterbridge and move to another town with Lucette, but he is offered a position of a mayor, so he has to stay. Lucette, in the meanwhile, meets Michael, begging to have mercy on her and return their correspondence to her. Michael finally agrees.
Joshua Jopp, who has lost his position of a manager, meets Lucetta soon after. He asks her to talk about him with her husband and persuade him to give him some position in his business. Lucette refuses and Jopp leaves, holding a big grudge. Unfortunately, Michael gives the package with the love letters exactly to Jopp, asking him to pass the package to Lucette. Jopp immediately opens the package and realizes that he has just got the perfect tool for revenge. He gives the letters to the townswomen who envy Lucetta and they glue the letters everywhere in the town at night. In the next morning all the Casterbridge is gossiping about Lucetta’s amoral behaviour. Poor woman learns about it and has a stroke from shock and shame that kills her on the spot.
Michael’s world has crashed. Now even the woman he still loved is dead. Still, there is another woman who loves him, though in the other way: Elizabeth-Jane. She comes to console her father and reconcile with him - but another sudden event happens. Newson, the sailor who bought Susan and was considered dead all along, comes to Casterbridge, searching for his family. Michael, not wanting to lose his last dear person, tells him that Elizabeth-Jane is dead as is Susan. Newson accepts the answers and goes away, grieving. Finally, Michael and Elizabeth-Jane have some time to live peacefully, as father and daughter, though Michael is constantly afraid of possible Newson’s return.
After some time, Farfrae returns to the town, again starting to court Elizabeth-Jane. Michael isn’t approving it for obvious reasons and starts to worry even more when his stepdaughter starts acting strange, finally telling him that she must meet someone important. This someone is Newson who finally finds her and clears the whole story to the young woman. Elizabeth-Jane marries Farfrae and Michael uses her wedding as his last chance to reconcile with the couple - but there he sees Newson present as the father of the bride and silently leaves, deciding to never remind his stepdaughter about his existence again. After a while Elizabeth-Jane learns that her stepfather has come to see her and reconcile, but it is too late. She goes to find him and says that she pardons him. Finally, Elizabeth-Jane realizes that Michael has spent his last days under the care of Abel Whittle, the ever-late worker who Michael wanted to fire long ago. Abel tells Elizabeth-Jane that Michael is dead and his last will was that no one should ever remember him. Elizabeth-Jane agrees to honor his will, returning to her family and starting the new life with it.