The narrator relates the story of how the French lieutenant’s woman, Sarah, found a place to stay in Mrs. Poulteney’s house. Mrs. Poulteney is a wealthy widow who sees herself as a charitable woman. However, she also prides herself for being highly moral. Mrs. Poulteney has told the vicar of her local church that she would like to help a young woman in need and asked if he would help her find someone.

After looking around, the vicar produces the story of Sarah Woodruff. The vicar tells Mrs. Poulteney some of the details he has learned about Sarah. She is from the nearby town of Charmouth, where she was trained as a governess and worked for the Talbot family. Currently, Sarah is unemployed because she left that job and has not found a replacement. Sarah left because of her involvement with a French lieutenant. A French ship ran into trouble during a strong storm off the coast. Only three people survived; families in Charmouth took them in. Captain Talbot, the head of the house where Sarah was working as a governess, offered hospitality to one of the survivors, the French lieutenant. Because Talbot did not speak French, Sarah was asked to interpret. She had studied French in her training as a governess.

The vicar assures Mrs. Poulteney that Sarah acted properly with the French lieutenant, although it is apparent that she must have fallen in love with him. After the lieutenant’s leg healed, he left Charmouth to stay in Weymouth, where he would be able to make connections for a passage back to France. Two days after the lieutenant left, Sarah asked Mrs. Talbot to release her from her governess position. Mrs. Talbot asked Sarah for a reason but Sarah did not explain her decision. No one is aware of what happened, except that the French lieutenant never returned to Charmouth and Sarah eventually moved on to Lyme.

After telling this story, the vicar tells Mrs. Poulteney that he is sure if Sarah had received better guidance, she would not be in her present difficult position. Through this statement, the vicar draws out Mrs. Poulteney’s sympathy for Sarah and appeals to the woman’s sense of charity to give Sarah a position and a home. The vicar adds that Sarah suffers from melancholia. She is constantly looking out at the sea, hoping the French lieutenant will return—or at least that is what everyone says.

Mrs. Poulteney’s sympathies are aroused. She asks that Sarah come to her for an interview. When Sarah arrives, Mrs. Poulteney asks her about the French lieutenant. Sarah refuses to provide details. Mrs. Poulteney interprets this as an expression of Sarah’s regret and believes Sarah is repentant for her past indiscretions (whatever feelings Sarah might have had for the French man). Mrs. Poulteney offers Sarah a room and a job as her assistant. Sarah accepts the offer but only because she has used up almost all of her savings.