Hoping to provide support for his mother and sister after the death of his father, Nicholas Nickleby turns to his uncle, Ralph Nickleby, for assistance.

Ralph wants nothing to do with his late brother's family and feigns to help Nicholas by securing a position as assistant master at the Dotheboys Hall school in Yorkshire run by unscrupulous Wackford Squeers. Nicholas soon becomes disgusted with Squeers' treatment of his pupils and leaves, giving Squeers a sound thrashing, and liberating Smike whom Squeers has mistreated for years.
Nicholas and Smike move in with Ralph Nickleby's clerk, Newman Noggs, in London and then travel to Portsmouth where they take up acting in Vincent Crummles' touring stage company.

On hearing of the mistreatment of his sister, Kate, at the hands of his uncle, Nicholas and Smike return to London. Nicholas secures employment with the philanthropic Cheeryble brothers and helps rescue Madeline Bray from the evil designs of his uncle and Arthur Gride.

Smike dies from the years of abuse suffered at Squeers' school and is found to be Ralph Nickleby's son. Meanwhile, Ralph is ruined financially and hangs himself. Squeers is sentenced to transportation, his school is disbanded, and Nicholas marries Madeline Bray.