Gene Forrester returns to visit the campus of Devon School, an all-boys preparatory school in rural New Hampshire, which he attended fifteen years prior. Two locations bear a mysterious significance to him, the first being a marble staircase inside a classroom building. The second is beneath a tree growing near Devon River. After standing outside, time moves back fifteen years to when Gene had still been a schoolboy standing near that same tree. His friend Phineas urges him to climb its branches and jump off to simulate abandoning a torpedoed ship--World War II is waging on in the outside world. Gene jumps out of its branches into the river with Finny, despite his fear.
During an accelerated class session in the summer of 1942, Gene becomes increasingly paranoid of Finny who is also his roommate. He is the best at every sort of sport while Gene excels in academics and is not very athletic at all. Finally he decides that Finny is just as jealous of him as he is of Finny. As this conflict unfolds within Devon's campus, the war wages on in the outside with a greater fury. Gene's obsession with Phineas becomes so overwhelming that, while jumping out of the tree again later in the summer he shakes the branch to intentionally knock Finny out of the tree. Finny's leg is broken and he is unable to play sports again. The Summer Session ends and the boys return to their homes.
Forrester feels guilty about what he has done and tries to confess to Finny but he refuses to believe that Gene, his best friend, would ever hurt him. Devon School becomes more regimented and orderly as the Winter Session begins and, with Finny's absence due to his injury, Gene decides that he will leave Devon early in order to enlist in the military and fight in the war. But he wants to fight not for patriotism but rather for the sake of committing violence. Finny returns to school unexpectedly, on crutches, and discourages him from doing this. Their friendship becomes stronger as the two open up to one another. They share one another's skills, for Gene tutors Finny in academics and Finny teaches him about sports. They both make great progress and forget about the war for a little while.
As the spring begins, militaristic Brinker Hadley suspects Gene of causing Finny's fall from the tree during that previous summer and holds a mock trial for the two. Finny realizes that his best friend really had knocked him off the branch purposely and is so upset that he falls down the same marble staircase that Forrester visits fifteen years later. His recovering leg is broken again. Gene speaks to him in the school's infirmary and apologizes for what he has done. Finny forgives him and regrets that he himself can't enlist to fight in the war because of his leg. Gene assures him that he'd be a terrible soldier anyway since he's so good-natured and innocent. Comforted, Finny then dies after marrow leaks from the broken leg, causing his heart to stop. Gene is shocked but remembers all that he has learned from Phineas and begins to treat the world with the same playfulness that his friend always had. He enlists in the Navy because of the draft but never makes it to actually fight in the war in Europe. He is happy for this and no longer wants to commit violence. Phineas has saved Gene from aggression and conceit, changing his understanding of the world forever.
