Silas Marner,a weaver, is an eager and promising young member of a Puritan religious community, Lantern Yard. Marner's supposed best friend, Willam Dane, frames him for the theft of a pouch of coins. Marner suffers from cataleptic fits which leave him as insensible as stone and vulnerable to Dane's frame-up. The community of Lantern Yard draws lots to determine Marner's guilt or innocence in the crime. After the lots proclaim Marner guilty, he flees from Lantern Yard, utterly crushed, leaving behind his faith in God and in humankind.
Marner eventually settles at the outskirts of Raveloe, a provincial village in the English Midlands. The villagers appreciate Marner's trade but find him strange and unapproachable. Marner seems to have supernatural powers--he is able to heal a local woman using herbal arts he learned from his mother--but the villagers of Raveloe do not know his background and thus find his knowledge diabolical and threatening. Marner, for his part, is content to live a life of almost total solitude in his simple cottage beside the Stone-pits.
Marner has one joy in life: gold. The gold coins that he earns at his loom represent for him all the meaning that he has lost, and the faces printed on the coins serve as his only company. He spends as little as he can in order to save more coins, which he hides in two leather bags in a hole in his cottage floor.
Meanwhile, Raveloe is the home of other wealthy citizens. Its most wealthy and distinguished family are the Casses. Squire Cass has two sons, Godfrey Cass and Dunstan Cass, who tend to cause trouble. Dunstan recently talked his older brother into embezzling rent money from one of the Squire's tenants. The Squire threatens to evict the tenant unless he can pay his rent. In order to replace the money they stole, Godfrey, a weak-willed pawn of his younger brother, agrees to sell his magnificent horse, Wildfire. The next day, while Godfrey attends a dance with Nancy Lammeter, the love of his life, Dunstan will sell Wildfire at a hunt.
But Godfrey has bigger problems than making good on the embezzling debt. Some time before, he rashly married a barmaid named Molly Farrell, who lives in a town to the north. This woman over time has turned into a laudanum addict and an alcoholic. Godfrey is hopelessly miserable, because not only does he loathe his decision to marry Molly, he is also deprived of marrying Nancy. He thus spends his days drinking away his sorrows, seeing Nancy when he can and putting off his seemingly inevitable fall from grace.
Dunstan sells Wildfire. But Dunstan then uses Wildfire in the hunt, in the course of which he impales Wildfire on a hedge-stake, killing the horse. Dunstan hatches a scheme to collect his money anyway. He knows well the rumor that Silas Marner, the crazy weaver, has hidden in his cottage a large hoard. He decides to stop by the weaver's cottage and use his leverage to "borrow" Marner's gold.
The night is foggy and dark when Dunstan finally arrives at Marner's cottage. When Marner doesn't answer, Dunstan invites himself in. After a quick search he finds Marner's gold and flees with it.
Marner returns from a short trip into the village to find his gold missing. Devastated, he rushes into Raveloe for assistance and ends up at the Rainbow tavern, where the locals have gathered for pints and conversation. At first the villagers are terrified of Marner. But eventually his sincerity wins them over, and they form a posse to fetch the constable and search for clues.
After several weeks of searching, the only clue uncovered is a tinder-box, which the villagers recall as having belonged to a suspicious travelling pedlar whom no one can find. Marner is left without his gold, utterly miserable, yet having made some headway in connecting with village life. The villagers pity Marner now more than they fear him, and they even bring him gifts of solace.