As the narrator tours Warwick Castle, he meets a "curious stranger" who claims to have shot a hole in the chain mail of Sir Sagramor le Desirous. That evening the stranger gives him his journal to read. The rest of the novel comes from the journal.

The journal is written by Hank Morgan, "a Yankee of Yankees," an artisan so skilled in metalworking he has become head superintendent of a factory. One night, Hank says, a worker hits him in the head during a brawl. When he wakes up, he is in Camelot in the year 528.

Morgan uses his knowledge of a solar eclipse that year both to escape execution and to achieve status as Arthur's "perpetual minister and executive." He appoints a page he calls Clarence to be his assistant, and together they set out to modernize the kingdom. Morgan makes it clear his goal is business, not altruism: he quickly becomes known as "The Boss."

Morgan's first official act is to set up a Patent Office. He also introduces gunpowder, schools, telegraph and telephone, soap, advertising, the sewing machine, a newspaper, the phonograph, the typewriter, steamships, baseball, electric lights, and Bessemer steel. Most of these innovations are made carefully and quietly, however. Morgan understands that a certain "readiness" is required in his market.

The greatest barrier to this readiness, in Morgan's view, is the attitude of the people that they are subservient to the king and the church. He acknowledges that King Arthur has greatness in him and that "not all priests were frauds and self-seekers, ... many, even the great majority, of these that were down on the ground among the common people, were sincere and right-hearted, and devoted to the alleviation of human troubles and sufferings" (Twain 100). As institutions, though, he views both the monarchy and the Roman Catholic Church as enemies to technological progress and human happiness. As a practical matter, then, he orders the telephone and telegraph wires to be laid at night, underground, in order to avoid attracting the attention and opposition of the Church.

Morgan has a series of adventures as he travels through England, first with Demoiselle Alisande la Carteloise, whom he nicknames Sandy; and later with King Arthur himself. Twain uses the opportunity to describe horrible poverty, brutal cruelty, and the dignity with which the common people endure it.

After a few years Morgan, now a family man, is tricked into taking his wife and daughter to France. Suspicious, he returns to England secretly to discover that the Round Table has been torn apart by internal fighting and that the Church has imposed the Interdict. Morgan, Clarence, and 52 young men, the only ones loyal to him, hide in Merlin's Cave fortified with electrical fences and Gatling guns. They successfully defend themselves against the assault of the knights but find themselves trapped in their fort. They can't leave safely, and they can't stay amid the bodies and disease. The conquerors, Twain writes, became the conquered.

A dying knight stabs the Boss. Merlin, disguised as an old woman, pretends to care for his wound. Instead he casts a spell which will cause him to sleep 13 centuries.

At this point the journal ends. The narrator seeks out the stranger and finds him delirious, dreaming of Sandy and Camelot, and dying.