The novel tells the story of a fictitious Sicilian mafia family living in New York and headed by Don Vito Corleone.
The novel begins on the day that Conny Corleone, Don Vito Corleone's daughter, marries Carlo Ricci. Amerigo Bonasera attends the weding in order to ask Don Vito Corleone for help. Bonasera's daughter has been badly beaten and he wants to take revenge. During the wedding, Don Vito is also asked a favor by his godson Johnny Fontane, a singer and actor. The Don's youngest son Michael Corleone has come back from fighting in World War II and goes to the wedding with his girlfriend, Kay Adams. The consigliere, Tom Hagen, is always near the Don and, as his title implies, gives counsel. The first chapter also introduces the Don's other sons Santino (Sonny) Corleone, who is cheating on his wife with Lucy Mancini, and Fredo Corleone, a shy and soft man.
After the wedding, Tom Hagen has to go to Hollywood to try to convince director Jack Woltz to give Johnny Fontane a role in his new movie. Tom Hagen is going to make "an offer he can't refuse", in the Don's words. Woltz refuses and Hagen orders the killing of Woltz's beloved horse; its bloody head is put on his own bed.
Virgil Sollozzo, also known as The Turk, asks for Don Corleone's protection for his drug business. Don Vito refuses. Sollozzo appears to accept his response but Vito Corleone is shot soon afterwards. Nevertheless, the Don survives.
Michael Corleone goes to the hospital to take care of his father. He finds out that no police officers are guarding the room and tries to move Don Vito to a safer room, aided by a nurse. Enzo, one of Vito Corleone's mobsters, comes and helps him. They both stand guard on the main door trying to simulate the carrying of guns. Soon, rival gangsters come but they cannot attack Don Corleone. Next, the police come and Michael Corleone is hit in the face by Captain McCluskey, a corrupt officer receiving orders from Sollozzo. Tom Hagen arrives with detectives and the Don is saved. Vito Corleone tells his son that he has been running for his life ever since he was a child. In the following chapters, the action shifts back to events earlier in Vito Corleone's life.
As a boy in Sicily, Vito Corleone's father and brother are murdered by a local mafia chief. Don Ciccio. Vito's mother goes to visit Don Ciccio to beg him not to kill Vito, saying he is an idiot who cannot even speak. Don Ciccio does not believe her and she then tries to kill him. Don Ciccio's bodyguards kill her and Vito flees. Some people help him leave Sicily and get to the USA.
As a young adult in New York's Little Italy, Vito Corleone confronts Fanucci, a member of a gang called the Black Hand who extorts money from people in the neighborhood. Fanucci asks Vito and his thieving friends Tessio and Clemenza for money. if they do not pay, he will not permit them to continue looting. Vito agrees and assures his friends that Fanucci will accept less money than he originally asked for, because Vito will make him "an offer he can't refuse". Fanucci and Vito appear to reach an agreement but Vito later brutally murders him. Don Vito then faces no serious threats from rival gangsters for decades.
Back in the present, the Corleone Family is gathered to decide what to do. Nobody wants Michael to be involved in crime, but he offers himself to get rid of Sollozzo and McCluskey during a "peace" meeting. He kills them both in a restaurant and flees to Sicily to avoid jail. The Corleone Family makes sure that the truth about McCluskey's corruption is released to the newspapers.
When Michael is in Sicily, he marries a young local woman named Apollonia. She is killed by a car bomb which was meant for Michael.
Sonny Corleone, as temporary head of the family, starts a war against Sollozzo, during which many rival mobsters are killed. After some time, the Don recovers and goes back home. He learns that Michael killed Sollozzo and feels deeply unhappy because he wanted a better life for Michael.
Having received a call from his sister who is suffering from domestic abuse, Sonny Corleone goes to confront her husband Carlo. On the way to her house, he is killed at a toll booth by machine gun fire. After that, Don Vito organizes a meeting with the heads of the Four Families and makes peace. He notices that the one who organized everything was Don Barzini.
Michael Corleone becomes the new Don and Don Vito becomes his consigliere. Some time afterwards, Don Vito suffers a heart attack.
As the new Don, Michael Corleone decides to kill the heads of the Four Families, to take revenge on Santino and Apollonia. He orders the killings to happen during the baptism of his nephew, becoming the child's Godfather. After that, he orders the killings of Carlo and Tessio.
Basis in reality
Puzo admitted he was inspired by reading about the trials of famous mafiosi. Some characters and families are based on real people: The Five Families of New York (Corleone, Tattaglia, Cuneo, Stracci and Barzini) are based on real Mafia families from the prohibition era.