The story describes a young woman and her husband. He imposes a rest cure on her when she suffers "temporary nervous depression" after the birth of their baby. They spend the summer at a colonial mansion, where the narrator is largely confined to an upstairs nursery. The story makes striking use of an unreliable narrator in order to gradually reveal the degree to which her husband has "imprisoned" her due to her physical and mental condition: she describes torn wallpaper, barred windows, metal rings in the walls, a floor "scratched and gouged and splintered," a bed bolted to the floor, and a gate at the top of the stairs, but blames all these on children who must have resided there.
The narrator devotes many journal entries to describing the wallpaper in the room – its "sickly" color, its "yellow" smell, its bizarre and disturbing pattern like "an interminable string of toadstools, budding and sprouting in endless convolutions," its missing patches, and the way it leaves yellow smears on the skin and clothing of anyone who touches it. She describes how the longer one stays in the bedroom, the more the wallpaper appears to mutate, especially in the moonlight. With no stimulus other than the wallpaper, the pattern and designs become increasingly intriguing to the narrator. She soon begins to see a figure in the design. Eventually, she comes to believe that a woman is creeping on all fours behind the pattern. Believing she must free the woman in the wallpaper, she begins to strip the remaining paper off the wall.
When her husband arrives home, the narrator refuses to unlock her door. When he returns with the key, he finds her creeping around the room, rubbing against the wallpaper, and exclaiming, "I've got out at last... in spite of you." He faints, but she continues to circle the room, creeping over his inert body each time she passes it, believing herself to have become the woman trapped behind the yellow wallpaper.