A mysterious man, Griffin, arrives at the local inn owned by Mr. and Mrs. Hall of the English village of Iping, West Sussex, during a snowstorm. The stranger wears a long-sleeved, thick coat and gloves; his face is hidden entirely by bandages except for a fake pink nose; and he wears a wide-brimmed hat. He is excessively reclusive, irascible, unfriendly, and introverted. He demands to be left alone and spends most of his time in his rooms working with a set of chemicals and laboratory apparatus, only venturing out at night. While Griffin is staying at the inn, hundreds of strange glass bottles (that he calls his luggage) arrive. Many local townspeople believe this to be very odd. He becomes the talk of the village with many theorizing as to his origins.

Meanwhile, a mysterious burglary occurs in the village. Griffin is running out of money and is trying to find a way to pay for his board and lodging. When his landlady demands that he pay his bill and quit the premises, he reveals part of his invisibility to her in a fit of pique. An attempt to apprehend the stranger is frustrated when he undresses to take advantage of his invisibility, fights off his would-be captors, and flees to the downs. In the process, he arms himself with an iron pipe; when a man follows the "floating pipe" and accidentally forces the Invisible Man into thorn bushes, the Invisible Man commits his first murder.

There Griffin coerces a tramp, Thomas Marvel, into becoming his assistant. With Marvel, he returns to the village to recover three notebooks that contain records of his experiments. When Marvel attempts to betray the Invisible Man to the police, Griffin chases him to the seaside town of Port Burdock, threatening to kill him. Marvel escapes to a local inn and is saved by the people at the inn, but Griffin escapes. Marvel later goes to the police and tells them of this "invisible man," then requests to be locked up in a high-security jail.

Griffin's furious attempt to avenge his betrayal leads to his being shot. He takes shelter in a nearby house that turns out to belong to Dr. Kemp, a former acquaintance from medical school. To Kemp, he reveals his true identity. Griffin is a former medical student who left medicine to devote himself to optics. He recounts how he invented chemicals capable of rendering bodies invisible, and, on impulse, performed the procedure on himself.

Griffin tells Kemp the story of how he became invisible. He explains how he tried the invisibility on a cat, then himself. Griffin burned down the boarding house he was staying in, along with all the equipment he had used to turn invisible, to cover his tracks, but he soon realised that he was ill-equipped to survive in the open. He attempted to steal food and clothes from a large department store, and eventually stole some clothing from a theatrical supply shop on Drury Lane and headed to Iping to attempt to reverse the invisibility. Having been driven somewhat unhinged by the procedure and his experiences, he now imagines that he can make Kemp his secret confederate, describing a plan to begin a "Reign of Terror" by using his invisibility to terrorise the nation.

Kemp has already denounced Griffin to the local authorities and is waiting for help to arrive as he listens to this wild proposal. When the authorities arrive at Kemp's house, Griffin fights his way out and the next day leaves a note announcing that Kemp himself will be the first man to be killed in the "Reign of Terror". Kemp, a cool-headed character, tries to organise a plan to use himself as bait to trap the Invisible Man, but a note that he sends is stolen from his servant by Griffin.

Griffin shoots and wounds a Scotland Yard Inspector who comes to Kemp's aid, then breaks into Kemp's house. Kemp bolts for the town, where the local citizenry come to his aid. Griffin is cornered, seized, and savagely beaten by the enraged mob, with his last words being a desperate cry for mercy. Despite Griffin's murderous actions, Kemp urges the mob to stand away and tries to save the life of his assailant, though it is not to be. The Invisible Man's battered body gradually becomes visible as he dies, pitiable in the stillness of death. A local policeman shouts to have someone cover Griffin's face with a sheet.

In the epilogue, it is revealed that Marvel has secretly kept Griffin's notes and—with the help of the stolen money—has now become a successful business owner, running the "Invisible Man Inn". However, when not at work running his inn, Marvel sits in his office trying to decipher the notes in the hopes of one day recreating Griffin's work. Because several pages were accidentally washed clean during the chase of Griffin by Marvel and since the remaining Griffin's notes are coded in Greek and Latin (and since Marvel has no comprehension of even the basic mathematical symbols he sees in the notes), Marvel is completely incapable of understanding them.