There is a father, a mother, the 17 year old daughter, and old grandmother, and a young traveler who shows up and makes himself at home with the family. There are other children as well. None are given names. It is told like a fable, so there are no names at all, just descriptions through actions and words.
The traveler begins by telling them of his ambition. He wants to make his mark in the world. This talk gets the individual family members talking about their secret wishes as well. The father wants to rank higher in life than he does. He wants more respect from others than he gets. The younger child of theirs wants to go "drink from the basin of the Flume" which is a dangerous spot out in the cold. The grandmother wants them to hold a mirror above her when she is dead and in her casket so that she may see herself and make sure all is well before they bury her.
However, the mother and daughter have odd feelings about all of this ambition being discussed. The 17 year old girl thinks it best to just sit by the warm fire and be comfortable and content. The mother doesn't want her husband to get too ambitious. She'd rather not lose him. These are the characters and what they represent.
There are only sketchy descriptions of the family that lives in the cottage where the "ambitious guest" stops.
There is the father, who owns "a primitive tavern." After listening to the "frank-hearted stranger," the father begins to wish that his family had a prosperous farm. He would like to be called Squire by his neighbors, as well. His wife, Esther, teases him about his dream of a farm, saying that he wants this when he becomes a widower. Then, one of at least three small boys in the family leaves the bedroom and tells his mother that he wishes that all of them could go with the stranger to the Flume and drink from the Basin. The oldest girl among at least two others, who is seventeen and described by the narrator as a "mountain nymph," says that she feels a bit lonesome this night.
Perhaps the most descriptive passage of those living in the cottage is one in which the family watches the fireplace after hearing "a wail along the road":
There were the little faces of the children, peeping from their bed apart, and here the father's frame of strength, the mother's subdued and careful mien,...the budding girl, and the good old granddam, [the husband's mother] still knitting in the warmest place.
It is important to note that in the works of Nathaniel Hawthorne, character traits are only significant if they represent some inner reality. For this reason, then, the description of the family that lives in the Notch is fairly sketchy since the members seem to be representative of individuals who do not develop their curiosities. The cottage dwellers are described only as having,
a consciousness of unity among themselves, and separation from the world at large.
Still, the exposition of "The Ambitious Guest" introduces the reader to the cottage dwellers who, though non-travelers themselves, have occasion to at least "have daily converse with the world." Since the stagecoach that runs between the Green Mountains of Maine on the one side and the "shores of the St. Lawrence" on the other stops at the cottage on the way, this family, who owns one of those "primitive taverns," has occasion to meet and converse with many different people. Such a situation seems to satisfy them.
It is not until the "frank-hearted stranger" arrives at their door that the family begins to think of another way of living. "One glance and smile" put this stranger on good terms with the eldest daughter who is seventeen. The father, the "master of the house," takes the stranger's knapsack for him. In this household of a least three younger brothers and one older one, the seventeen-year-old and at least two younger sisters, a father, a mother named Esther, and an old grandmother, there is warmth and contentment. It is not until the ambitious guest sows the seeds of curiosity about the world in the minds of his contented hosts that they put aside their complacency.