The story is set up as a series of letters that the main character, Charlie, writes to an unnamed friend. Charlie has chosen to write to this person because this person didn't sleep with someone at a party, even though he could have. Charlie needs someone to "listen" to him, to try and help him figure out his life. He thinks maybe his family has a part to play in the reason he is both happy and sad. The previous year, his good friend Michael shot himself, and a counselor said it was because he had problems at home.
Charlie writes about his home. He has an older brother who is a freshman in college and an older sister who is a senior in high school. Charlie is beginning high school and is afraid of what it will be like. His Aunt Helen used to be his favorite relative. She lived with his family for several years because of something bad that had happened to her. Charlie didn't find out until much later that she had been molested as a child.
Charlie has difficulty fitting in with the other students in high school. He is smart, quiet and socially awkward. When another student tries to bully him, Charlie defends himself as his older brother taught him to do. He ends up severely hurting the bully, but he isn't suspended because another student explains that Charlie was defending himself.
One night, Charlie's sister tells a boy that likes her that he is a coward because he didn't stand up to the class bully in the past. She uses Charlie as an example of a quiet kid who stands up to bullies. The boy is upset and hits her. Charlie's sister gets quiet and asks Charlie to leave the room. She tells him not to tell their parents what happened. She later says that she and the boy are going out. Another night, Charlie walks in on them having sex.
Charlie gets up the courage to attend a football game by himself. He approaches a kid he recognizes from his shop class. The boy, Patrick, invites Charlie to sit with him. He introduces Charlie to the pretty girl at his side, Sam. They let Charlie tag along with them after the game to Big Boy and ask him questions about himself. Charlie is excited to learn that they aren't dating but are stepbrother and sister. Later, he is ashamed because he has a dream in which he and Sam are naked on the couch, just as he'd seen his sister and her boyfriend.
Charlie doesn't like that he's seen Sam naked without her permission. He apologizes to Sam. She laughs, but not in a mean way, and gives him a hug. She tells him not to think of her that way because she is too old for him. Patrick tries to explain how relationships work, but Charlie becomes confused.
His English teacher notices Charlie studying people at a dance and later asks him if he always thinks so much. He worries that Charlie is only watching life, not participating in it. He then asks Charlie if he is having any problems at home. Charlie tells his teacher about the boy who hit his sister. The teacher calls Charlie's parents, and they forbid his sister to see the boy again. Charlie's sister tells Charlie that she hates him.
Charlie's friendship with Sam and Patrick grows. They invite him to a party after the homecoming dance. It is his first party. The kids are all older, and many are drinking and doing drugs. The host gives Charlie a brownie laced with marijuana. While waiting for Sam to make him something to eat, Charlie walks in on Patrick and Brad — the high school quarterback, kissing. Patrick makes Charlie promise not to tell anyone.
For the first time, Charlie feels accepted. Understood. Later, when he tries to remember the night, he recalls how Sam stood up in the back of Patrick's pickup truck as they drove through a tunnel. At that moment, Charlie felt infinite.
Back in school, Patrick tells Charlie about his secret relationship with Brad. It used to be that Brad had to get drunk or stoned before they could fool around, but now, as long as they meet in quiet places where no one really knows Brad, they can make love. Charlie's English teacher challenges him with extra reading and essays, which Charlie enjoys. He begins to think that maybe he'll be a writer and volunteers to work on a fanzine about punk rock that some of his new friends run.
Charlie is falling deeper in love with Sam. He wishes she would break up with her boyfriend, Craig. He doesn't believe Craig listens to Sam or appreciates her beauty. Charlie talks to his sister about his feelings. She tells him Sam suffers from low self-esteem. When she was a sophomore, Sam was known as the "blow queen." His sister admits that — behind her parents' back — she is seeing the boy who hit her. She says they are in love and will get married when they finish college.
Charlie laments to his friend about how stressful the holidays are in his family. His grandfather usually drinks too much and loudly complains about black people, family secrets and how dry the dinner is. Charlie's great aunt then locks herself in the bathroom and cries. All the men in the family have to urinate in the bushes outside while the girls just have to suffer. Charlie's father drinks a lot when he's around his father-in-law, but he remains quiet, even on the ride home.
This Thanksgiving is different, however, because Charlie's brother is playing football for Penn State, and they all watch a VCR tape of the game. For the first time, no one fights. Charlie's grandfather cries quietly. Charlie suspects it's because he was is thankful that no one else in his family would ever have to quit school and work in the mill as he'd had to do as a teenager.
Charlie is excited about participating in a "Secret Santa" tradition with his new friends. Charlie gets Patrick's name. Charlie gives Patrick several artistic gifts. For his final present he buys a book about Harvey Milk, a gay leader in San Francisco. Charlie's first Secret Santa gift is a pair of socks. As the days go on, Charlie receives all the pieces to a suit, except the coat, and is told to wear them at the upcoming Christmas party.
Charlie is surprised to learn that Patrick was his Secret Santa until Patrick explains that all writers need a good suit and Charlie will be a great writer someday. Sam gives him an old typewriter with a note to write about her someday. She also gives him his first kiss because, unlike her experience, she wants Charlie's first kiss to be with someone who loves him.
Charlie sinks into depression over the Christmas holiday. It is something he does every year since his Aunt Helen died. She died in a car accident on his birthday, which falls on Christmas Eve. Charlie feels guilty because she went out in a snowstorm to buy him a present. When Aunt Helen died, Charlie was hospitalized for his depression. He missed the rest of the school year while he underwent therapy.
At a New Year's Eve party, Charlie tries LSD and ends up falling asleep in the snow. The police don't suspect drugs as Charlie used to do this kind of thing after his aunt died. The doctor at the hospital suggests Charlie start seeing a psychiatrist. Charlie continues to have lingering effects from the drug — trees move, voices are distorted. He worries until Sam explains that some people are very effected by LSD. She gives him a few tricks to help the hallucinations stop and then warns that he should never do acid again.
At a school dance, Charlie sees his sister argue with her boyfriend. Later, he finds her crying in the basement. She admits she's pregnant. The following week, Charlie drives her to an abortion clinic. Charlie starts to cry while he waits for his sister, wondering if this will change her. He hides in the car so no one will see him. When his sister finds him, she's angry that Charlie is smoking. This makes him happy because he knows that the procedure hasn't changed her. He promises not to tell their parents.
Charlie begins dating a friend of Sam's, Mary Elizabeth. She is nice, but talks too much, always about herself. He is upset when Mary Elizabeth invites herself over to a special dinner he'd planned with Sam and Patrick. Charlie becomes very confused about his relationship with Mary Elizabeth, as she seems to change, becoming more needy and less self-assured the more they date and especially after they make out one night.
Later, at party, Patrick dares Charlie to kiss the prettiest girl in the room. Charlie decides to be honest and kisses Sam, not Mary Elizabeth. In the uproar that follows, Patrick takes Charlie home. He tells Charlie that they will call when things settle down. When several weeks go by with no call, Charlie stops by a mutual friend's house to buy some marijuana. The friend tells him that Patrick is in a bad state because Brad's father caught him and Brad together. He severely beat Brad.
When Brad finally returns to school, he won't acknowledge Patrick. They fight in the cafeteria after Brad calls Patrick a faggot. Brad's teammates get involved, and Charlie jumps in. He injures two of the football players before the fight stops. Charlie warns Brad that if he ever tries to hurt Patrick again, he will tell his secret. Charlie isn't suspended, but he has to serve a month of detention.
After the fight, Charlie and his friends make up. Charlie spends a lot of time with Patrick to try and help his friend through the loss of his boyfriend. Patrick takes him to gay bars and to a park where gay men meet in secret. Mostly Patrick talks about how much better college will be. Charlie lets Patrick kiss him, but they go no further.
As the school year ends, Charlie must deal with many changes. His sister and his friends are graduating. Sam breaks up with her boyfriend when he admits that he's been seeing other girls. Charlie realizes that he truly loves Sam because he isn't happy that she is free now. He only cares that she is sad and hurt.
Before she leaves for a summer class at college, she talks to Charlie. She encourages him not to put everyone's needs in front of his own, not to let people do things to him because he thinks it will make them happy. He has to be true to himself and make himself happy. Only then will he be able to find someone to love him for who he really is, not an image he thinks they desire. She asks him point blank what he wants and needs. Instead of answering, he kisses her.
The two end up on her bed. Charlie is enjoying touching Sam until she puts her hand down his pants. Then he stops her. He doesn't explain his feelings, just that he is upset. He's in such bad shape that Sam won't let him drive home. Charlie dreams that night about a time when he was younger and watching television with his Aunt Helen. In the dream, she touches him like Sam did.
The following day he falls into a catatonic state. The next letter, addressed some two months later, explains that he stayed unresponsive for a week, but then began to get better. He stayed in the hospital for two months, working through his memories with a new doctor. His family and friends rally around him, and Charlie is eventually released. Charlie realizes that it does no good to blame anyone for what happened to him. In the end, everyone must deal with what happens in his own life and take responsibility for the choices he makes.
The day after he is released from the hospital, he, Sam and Patrick go out together. This time, Charlie stands in the back of the pickup truck as they drive through the tunnel. For the moment, Charlie feels infinite again. He tells his unnamed friend that this will probably be his last letter. He starts his sophomore year of high school the following day and will probably be too busy trying to live his life, rather than just watching it. He hopes things go well for his friend.