Oliver Twist is born in a workhouse (a place where the poor and homeless are provided with work and shelter) in a small town in England. Oliver's mother dies moments after his birth, and since no one knew her name or the identity of Oliver's father, the baby is considered an orphan and sent to a baby farm.
At the baby farm, Ms. Mann gives minimal care to the boys — underfeeding and mistreating them. When Oliver turns 9 years old, Mr. Bumble, the parish beadle (a lay official of the church who carries out various administrative duties), takes him from the baby farm to live in the workhouse and work picking oakum.
The boys in the workhouse have difficult lives, and after suffering slow starvation for months, they become desperate and draw lots to see who will ask the master for more food. The job falls to Oliver, who nervously requests more food after the next meal. The master and the board, a group of men who oversee the workhouse, are aghast at Oliver's request. After ordering the boy into immediate confinement, they offer a reward of five pounds to anyone who will take Oliver off the parish's hands.
An abusive chimney sweep offers to apprentice Oliver, but when Oliver begs the magistrate in charge of making the decision not to send him with the man, the magistrate denies the chimney sweep's request. Later, an undertaker, Mr. Sowerberry, takes Oliver from the parish as an apprentice and treats him better than anyone has before. Mr. Sowerberry's wife, however, underfeeds Oliver and treats him poorly, as does Noah Claypole, another of the undertaker's apprentices, and Charlotte, the Sowerberrys' maid.
Noah constantly bullies Oliver. After Oliver is promoted by Mr. Sowerberry, Noah is filled with jealously and insults Oliver's birth mother by calling her names. In a fit of anger, Oliver throttles Noah and beats up the bigger boy. Mrs. Sowerberry and Charlotte come to Noah's defense, restraining and beating Oliver. They convince both Mr. Sowerberry and Mr. Bumble to beat him when they arrive in the aftermath of the fight. When Oliver is sent to his room that night, he cries and decides to run away.
Oliver escapes the Sowerberry home, but after walking every day for a week, he is exhausted and starving. Oliver then meets a boy named Jack Dawkins, nicknamed the Artful Dodger. Dodger is friendly to Oliver, giving him food and offering him a place to stay in London in the home of an old gentleman. The gentleman turns out to be a man named Fagin, nicknamed the Jew, the leader of a gang of young pickpockets. Oliver naively believes the boys make wallets and handkerchiefs to support themselves.
One day, thinking they are going to make goods in a factory, Oliver asks to go with Dodger and another boy, Charley Bates. It's only after the two boys have picked a man's pocket that Oliver realizes what they do. Terrified, Oliver flees the scene.
When the victim, Mr. Brownlow, sees Oliver fleeing, he realizes that he has been robbed. He pursues Oliver, and an angry mob follows. Oliver is caught and taken to the magistrate, but Mr. Brownlow begins to have second thoughts about Oliver's guilt. Just as Oliver is about to be sentenced to hard labor, a bookstall owner arrives and clears his name by telling the magistrate that he saw the other boys pick Mr. Brownlow's pocket. By this time, Oliver is sick and passes out in the courtroom.
Mr. Brownlow takes Oliver home, and with the help of his housekeeper, Mrs. Bedwin, nurses Oliver back to health. Mr. Brownlow and Mrs. Bedwin show Oliver more kindness than he has ever experienced. In Mr. Brownlow's house, Oliver sees a portrait of a woman, and it has a strange effect on him. Even Mr. Brownlow remarks on the resemblance between Oliver and the woman in the portrait.
Fagin is furious when Dodger and Charley return without Oliver. He throws a pot of beer at them, but it misses and hits a visitor, Bill Sikes. Sikes is a brutal thief and an associate of Fagin's. Both men agree that they must find Oliver before he reveals their criminal operation to the authorities. They send a girl named Nancy, a member of Fagin's gang, to the police station. She pretends to be Oliver's distraught sister to get information on his whereabouts. The gang finds out where Oliver has been, and when the boy goes out to pay for some books for Mr. Brownlow, Nancy and Sikes kidnap him. They bring Oliver to Fagin's hideout. The gang steals his new clothes and takes the five pounds Mr. Brownlow gave to him. Nancy feels bad for Oliver and defends him.
Determined to force Oliver into becoming a criminal, Fagin sends him to help Sikes with a burglary. Sikes tells Oliver to go through the small window of a house and open the front door for them. Sikes threatens to kill Oliver if he does not cooperate. Oliver goes into the house with the intention of warning the sleeping occupants but finds them awake instead. Oliver is shot in the arm.
Sikes helps Oliver get back through the window, but he leaves the boy in a ditch. Oliver wakes up delirious and knocks on the front door of the house he was to help rob. He ends up being taken care of by the wealthy owner, Mrs. Maylie, and her niece, Rose.
After the botched robbery, Monks, a mysterious associate Fagin has been working with, confronts Fagin and admonishes him for his inability to turn Oliver into a criminal. He would like to have Oliver thrown in jail, but he does not want to be involved if the boy is killed.
In a scheme to become master of the workhouse, Mr. Bumble marries the workhouse's wealthy matron, but the marriage is not a happy one. After having an argument with his wife, Mr. Bumble goes to a local pub where he meets Monks. Monks questions him about Oliver, and Mr. Bumble arranges to exchange information about Oliver for money. Mrs. Bumble, who heard the deathbed confession of the nurse who delivered Oliver, tells Monks what she knows and gives him a locket and a wedding ring with the name "Agnes" engraved on it. Monks throws the jewelry in the river. Monks tells Fagin everything he learned from the Bumbles, unaware that Nancy is eavesdropping.
Feeling guilty about her involvement in Oliver's kidnapping and determined to help the boy, Nancy goes to Rose and Mr. Brownlow to let them know that Oliver is in danger. Suspicious of Nancy's behavior, Fagin has Noah, who by this time has stolen from Mr. Sowerberry, fled to London and now works for Fagin's gang, spy on Nancy. Fagin learns that Nancy has secretly met with Rose and Mr. Brownlow. He tells Sikes but twists the truth to make it seem as if Nancy has informed on Sikes. In a fit of rage, Sikes beats Nancy to death. Sikes tries to hide from the police but is eventually pursued by an angry mob demanding justice. He accidentally hangs himself on a rope that he was using to escape a rooftop.
Based on the information that Nancy provided about Monks, Mr. Brownlow is able to find him and force the man to explain his relationship to Oliver. Monks is really Edward Leeford, Oliver's half-brother. Mr. Brownlow was a close friend of Monks' and Oliver's father, Mr. Leeford, which is why he has a picture of Agnes (Oliver's mother) in his house. Mr. Leeford and Monks' mother had an arranged marriage, and although they separated, they never divorced. Mr. Leeford met and fell in love with Agnes. She became pregnant, but he died before the child was born. Mr. Leeford left a stipulation in his will that his unborn child would receive an inheritance only if he did not commit a crime. Monks has been trying to find Oliver and ruin his chances of inheriting.
Mr. Brownlow convinces Oliver to give half his inheritance to Monks, who takes it, moves to the New World, squanders it and ends up in prison where he dies. Fagin is arrested and sentenced to death for his crimes, and Noah is pardoned because he testifies against Fagin. The Bumbles admit their part in hiding Oliver's identity, and Mr. Brownlow sees to it that they never hold public office again. The couple is disgraced, loses everything and ends up in the workhouse they once ran. Rose turns out to be Agnes' younger sister, and therefore, Oliver's aunt. Mr. Brownlow adopts Oliver as his son.