Daniel Deronda first sees Gwendolen Harleth in a Casino in Germany. Daniel and Gwen have an instant attraction to one another.
Then the story goes back a few months to England. Gwen has recently moved to a new home with her mother and Daniel is in London with his friend Hans, but soon returns to the home of Sir Hugo Mallinger, the man that has brought Daniel up.
Daniel tells Hugo he wishes to leave university and travel to Germany. Gwen is spending a lot of time with her cousin Rex who has hidden feelings for Gwen but she does not seem to notice.
One day while horse riding Rex tells Gwen about a house that belongs to Hugo Mallinger but will be inherited after his death by a man called Henleigh Grandcourt, who while be visiting the archery contest that Gwen will be involved in.
Later that day Rex expresses his love for Gwen but she tells him she doesn't love him. Gwen and Grandcourt meet at the archery contest and are at once interested in each other. As they spend more and more time together it becomes clear to everyone that Grandcourt wishes to propose and Gwen wishes to accept.
But on the day that Grandcourt is set to propose Gwen meets a woman called Lydia Glasher who tells Gwen that she is Grandcourt's mistress and if anyone is to marry him it will be her. Gwen is so shocked by the news and wishes never to be near Grandcourt again, so she flees to Germany.
The story then returns to Germany where Daniel and Gwen have just seen each other. Gwen receives word from her mother that all there money is lost and that she must return to England at once. She decides to sell her necklace so she has money.
As she is leaving she receives a parcel from a stranger which contains a note and the necklace she has just sold: Gwen realises that the parcel is from Daniel. Grandcourt searches for Gwen in the casino which he knows she is staying but is informed by Hugo and Daniel that she is no longer there, it is then explained to Daniel the connection between Gwen and Grandcourt.
When Daniel has returns to England he is rowing along the Thames, where he finds a young woman trying to drown herself. He saves her and takes her to Hans house where Hans mother takes care of her.
When Gwen finds out that she must become a governess she is outraged and so she visits a man called Herr Klesmer who is a well known Jewish musician to find out if there is any chance she could be come a singer, he tells her that there is not.
Daniel returns to Hans house to find that the woman is recovering well. She tells him her name is Mirah and that she is Jewish and how she ran away from her father to find her mother. Daniel tells Mirah that he also never knew his mother.
Grandcourt visits Gwen and asks her to marry him, she agrees so not to have to become a governess. Daniel visits Grandcourt to ask him if he will sell the house back to Hugo.
Gwen is at the house when Daniel visits and they become more acquainted even though both seem distressed by Gwen being engaged.
Grandcourt refuses to sell the house to Hugo or to Daniel. Daniel visits Mirah again and listens to her singing, and decides to help her with her singing career.
Mirah tells Daniel about her mother Sarah and her brother Ezra Cohen, Daniel goes in search of them. Grandcourt visits the house of Lydia Glasher to tell her he will be married to Gwen and that she must return the diamond necklace he gave her.
Lydia sends Gwen a letter, including the diamond necklace. Grandcourt and Gwen marry.