The title of the play refers to a character named Zoe. She is the so-called illegitimate (not produced by marriage) daughter of a plantation owner named Mr. Peyton and one of his slaves on this plantation, which is called Terrebonne. She is of mixed racial heritage, with one great-grandparent who was black. Being considered one-eighth black, she is called an "octoroon." Mr. Peyton is dead and his widow, Mrs. Peyton, and their nephew, George Peyton, are left to try to salvage the estate from all of the debts and liens against the property. Mrs. Peyton and Mr. Peyton never had any children of their own and basically raised Zoe as their child; even Mrs. Peyton loves her. George, upon arriving at the plantation from Europe, begins to fall in love with her. She is beautiful, educated, kind, and polished. George does not care about her mixed racial ancestry and wishes to marry her, despite the illegality of a mixed-race marriage.

Salem Scudder, a northerner who has been serving as the plantation's overseer, bears some responsibility for the poor state of affairs at Terrebonne. He has, evidently, sunk quite a bit of money into his inventions, and they have all been giant failures. Jacob M'Closky, another northerner who has taken over as a planter, has used underhanded measures to acquire half of the land on the estate, and he seems likely to purchase the rest of it. Both Scudder and M'Closky claim to be in love with Zoe as well.

There are a number of slaves on the plantation—Peter, Grace, and Dido to name a few—but Paul, a thirteen year-old boy, is the most important to the plot. He is beloved by an old Indian man named Wahnotee, who lives nearby and keeps watch over Paul. When Paul goes missing, Wahnotee is the first person blamed for Paul's death, until it is revealed that M'Closky is responsible.

There are also the two Sunnysides: Mr. Sunnyside and his daughter, Dora. Dora falls in love with George, but George loves Zoe. When Dora finds out, she is very angry at them and asks her father to buy the plantation, which he does.