Babbitt is set in the modern (1921) Midwestern city of Zenith. George F. Babbitt, a 46- year-old real estate broker, enjoys all the modern conveniences available to a prosperous middle-class businessman, yet he is dissatisfied with his life. When the novel opens, Babbitt has begun to regularly indulge in fantasies about a fairy girl who makes him feel like a gallant youth.

Babbitt's closest friend Paul Riesling is even more dissatisfied with his life. He is also more vocal about it. Riesling and Babbitt try to ameliorate their dissatisfaction by taking a vacation in Maine together, but their enjoyment at their newfound freedom is short-lived. They eventually have to return to their lives as middle-aged married men. Both men experience a growing impulse to rebel against social conventions.