In the early nineteenthth century, an Irish college student is drawn into a fantastic adventure involving his long-dead ancestor. When John Melmoth's uncle dies, leaving him without family, the young man learns of his uncle's wishes that an old portrait and some letters be destroyed. John complies regarding the portrait—which is of his ancestor, who was also named John Melmoth—but not the letters; through reading them, he learns that this ancestral John Melmoth had become known as "the Wanderer": various people had reportedly sighted him in different parts of Europe long after his death. One such witness was Edward Stanton, who wrote a manuscript stating that the Wanderer had tried to convince him to sell his soul to the Devil.

The Wanderer soon begins to appear to John and even attacks him physically. Around this time, a Spanish ship is wrecked near John's home; in trying to help the survivors, John meets the Spaniard Moncada. Moncada knows many stories (some involving him personally) of the Wanderer's adventures in Spain, which include tales from centuries earlier. One such story involves the daughter of Don Aliaga, who grew up to become the Wanderer's Satanic bride and was ultimately destroyed in the Inquisition. Her dying wish was to be allowed into heaven with the Wanderer.

After Moncada relates these tales, the Wanderer appears and tells John that he wishes to end his wanderings. He admits to his constant failure in trying to get people to sell their souls, to which not a single person had ever agreed. After one hundred and fifty years, he is exhausted by the futility. He requests that they leave him alone, and after they do so, they hear horrible noises behind the closed doors. The next morning, he is not there. The only remaining trace of him is a scarf near the seaside cliff, where he apparently had jumped or been pushed.