Anthony Trollope opens the novel with a discussion among the members of the Walker family about a scandal in their town. Mr. Walker is an attorney. The parents, son, and daughter all have different opinions of the matter. Trollope thus establishes the subject as one that prompts gossip and divided opinions before the narrator summarizes the situation in a length paragraph. Trollope tends to provide very detailed descriptions and to introduce apparently minor plot details rather early in the story.

The whole county was astir in this matter of this alleged guilt of the Reverend Josiah Crawley,—the whole county, almost as keenly as the family of Mr. Walker, of Silverbridge. The crime laid to his charge was the theft of a cheque for twenty pounds, which he was said to have stolen out of a pocket-book left or dropped in his house, and to have passed as money into the hands of one Fletcher, a butcher of Silverbridge, to whom he was indebted. Mr. Crawley was in those days the perpetual curate of Hogglestock, a parish in the northern extremity of East Barsetshire; a man known by all who knew anything of him to be very poor,—an unhappy, moody, disappointed man, upon whom the troubles of the world always seemed to come with a double weight.

In addition to Josiah Crawley and his wife, who somehow manages their household on a very meager living, their adult daughter, Grace, is a significant character. Being raised in near poverty, 19-year-old Grace has taken a job as a teacher in another town. The narrator tells us what others say about her appearance and her marital prospects.

[T]here were those who said that, in spite of her poverty, her shabby outward apparel, and a certain thin, unfledged, unrounded form of person, a want of fulness in the lines of her figure, she was the prettiest girl in that part of the world. She was living now at a school in Silverbridge, where for the last year she had been a teacher; and there were many in Silverbridge who declared that very bright prospects were opening to her,—that young Major Grantly of Cosby Lodge, who, though a widower with a young child, was the cynosure of all female eyes in and round Silverbridge, had found beauty in her thin face, and that Grace Crawley's fortune was made in the teeth, as it were, of the prevailing ill-fortune of her family.

There is considerable confusion about what money Mr. Arabin, the patron of the living, had given Mr. Crawley. He is traveling in the Holy Land and his wife is in Paris, so it is difficult to reach them. Whether cash or a check had been part of the payment is in dispute. As neither Arabin nor Crawley can adequately explain, and the butcher to whom the money was paid is anxious to receive legitimate payment, the story continues to spread. It reaches Archdeacon Grantly, the father of the Major Grantly who is interested in Grace. The Archdeacon is very concerned with appearances and his daughter has married a marquis. Although his wife is lukewarm on the subject, he is ardently opposed to the idea of his son marrying Grace. Confronting his son about his intentions toward her, he expresses his concerns about the rumors.

"Do you mean to tell me, Henry, that you are in love with Miss Crawley?" Then there was another pause, during which the archdeacon sat looking for an answer; but the major said never a word. "Am I to suppose that you intend to lower yourself by marrying a young woman who cannot possibly have enjoyed any of the advantages of a lady's education? I say nothing of the imprudence of the thing; nothing of her own want of fortune; nothing of your having to maintain a whole family steeped in poverty; nothing of the debts and character of the father, upon whom, as I understand, at this moment there rests a very grave suspicion of—of—of—what I'm afraid I must call downright theft."

The Bishop of Barsetshire is a mild-mannered man with a ferocious wife. Mrs. Proudie, who consistently inserts herself into Church business, decides that Crawley should not be preaching while he is under suspicion. She has her husband send Crawley a letter via another clergyman, Mr. Thumble, telling him not to preach on Sunday. Crawley is furious but steadfast in his determination to do his duty, as he tells Thumble.

I respect his lordship's high position as bishop of this diocese, and I bow to his commands in all things lawful. But I must not bow to him in things unlawful, nor must I abandon my duty before God at his bidding, unless his bidding be given in accordance with the canons of the Church and the laws of the land. It will be my duty, on the coming Sunday, to lead the prayers of my people in the church of my parish, and to preach to them from my pulpit; and that duty, with God's assistance, I will perform.

As Crawley's situation grows more dire, he acquires from London a new lawyer, Mr. Toogood, who dispatches a young man, John Eames, to Europe to locate the Arabins and find out exactly what happened with the check. When Eames finally reaches Mrs. Arabin, she has the solution: she had given Crawley the check but forgotten to tell her husband, so when he was asked about it, he did not have the right information. After that, the matter is resolved, Grace can be married, and Crawley is assigned to a better living.