Titus Groan is seven years old, and is already beginning to desire freedom from the rigorous, and constant ceremonies his position as Earl requires of him. Steerpike continues his rise through the ranks of the castle, and spends his time studying with Barquentine, the Master of Ritual. When not with Barquentine, he uses a complicated contraption of mirrors from which he can spy on all the important people and rooms of the castle.

Titus flees the Castle, attempting to avoid the rituals of the day. During this adventure he sees the Thing, the daughter of the woman who nursed Titus. She was exiled from the Bright Carver society because she was illegitimate, and thus lives in the woods alone. She becomes the symbol for freedom, and everything not Gormenghast, for Titus as he grows older. While in the woods he encounters Flay, the banished servant of the now dead Sepulchrave, and shares some information with him. Flay realizes that something is not right in the castle, though he knows not what it is yet.

The Countess and Doctor Prunesquallor have a similar sense of unease, though they cannot identify its source ither. Irman, the doctor’s sister, decides she wants to get married, so she throws a party for all the professors in the castle to attend, them being the largest group of bachelor’s available.

When Titus returns from his excursion, he is punished by being placed in solitary confinement for one week. Bellgrove, a professor who became headmaster when the previous headmaster died in a bizarre accident (truly an accident), comes to visit him. Bellgrove reveals that he loves to play marbles, and Titus joins him in playing the game. Prunesqallor arrives as well and the three play together. As a result Titus maintains a respect for the two men that no other authority figures will ever earn.

Steerpike decides it is time to make his next move, namely to murder Barquentine so he can become the new Master of Ritual. He sneaks into Barquentine’s room, without the other man’s notice. At that moment he sees Barquentine light a candle, and realizes that if he sets the man’s beard on fire, it will look like the perfect accident. He succeeds in doing so, but Barquentine fights back, grabbing onto Steerpike and refusing to let go.

Steerpike, suffering serious burns and desperate to end the fight, throws himself, with Barquentine attached, out of a window and into the moat that surrounds Gormenghast. Steerpike proceeds to drown Barquentine and then stumble to the shore. Nearly dead, he finds his way into the castle. Prunesquallor nurses him back to health. While he is recovering, he establishes himself as the new Master of Ritual.

Titus, who now has a secret passage that leads near to Flay’s cave, reveals this new turn of events to Flay. The old Steward returns to an abandoned part of the castle to keep better eye on things. The fact that Steerpike is the new Master of Ritual does not sit well with him. Flay maps out the abandoned area, and searches night and day for the source of strange sounds and laughter he hears one night. This, it turns out, is the dying twin sisters who Steerpike has imprisoned, though Flay does not realize it.

As Titus grows older, his desire for freedom from the rituals of Gormenghast grows ever stronger. Irma and Bellgrove get married, and Fuchsia and Steerpike begin to develop a relationship. Steerpike, ever scheming, hopes to marry her and kill Titus so he can further entrench himself as the one ruling Gormenghast. Prunesquallor, the Countess, and Flay, however, grow more wary of Steerpike, though they have no concrete proof of anything. Prunesquallor overhears Steerpike muttering about the "twins make five" though they can only guess at this being a confession of murder (Sepulchrave, Sourdust, Barquentine, and the twins), because they must also account for the disappearance of Swelter, the chef that Flay killed.

One night, Steerpike and Fuchsia are set to meet in one of Steerpike’s secret rooms. Fuchsia is early, and while waiting she hears a whisper (from Flay, though she doesn’t know) urging her to be careful. Scared, she lights a candle as Steerpike arrives. He grabs her, shoving her into the room, and calls her a "fool." Never having experienced such anger from him, her love shatters, and she leaves. Steerpike shocked at making such a mistake (he overreacted because of his new fear of fire), goes to muse on what he must do next. Flay, following him, gets the feeling that something is afoot.

Realizing his word alone is not worth much, he goes to get Titus as a witness. Titus joins him as they wait for Steerpike to make a move. Titus suggests Prunesqallor, whose room is nearby, should join them. Titus goes to get the doctor and Steerpike leaves, so Flay follows him. When Titus and Prunesquallor catch up, Steerpike is in the abandoned area where Flay lived. They watch as Steerpike enters a room, revealing the corpse of the twins. At this point Flay, Titus, and Prunesquallor are shocked, but they also realize they now have the evidence to remove Steerpike from his position of power.

When they confront Steerpike, he throws his dagger, killing Flay, and escapes. Titus and Prunesquallor return, spreading the word that Steerpike is a murderer. Flay is buried in a place of honor and the Poet becomes the new Master of Ritual.

The time arrives for the Mud Dwellers to bring forth their carvings. The three best are chosen, but while the others are being destroyed, the Thing arrives and steals one. Emboldened by her act of Freedom, Titus flees the castle as a great rain begins to fall. He hides in Flay’s old cave, and when he wakes the Thing is there with the carving. He reveals himself, but the Thing tries to flee, but Titus blocks her way. She falls, and Titus catches her just as Fuchsia arrives to find her brother. The Thing flees, but is struck by lightning and killed just outside the cave. Titus and Fuchsia must hurry home as floodwaters begin to rise.

The flooding continues until floor after floor of the castle is covered in water, and the residents are pushed higher and higher. The Bright Carvers move into the castle and begin building boats for want of something to do. Steerpike, using a slingshot, begins randomly killing people.

Titus receives a canoe as a gift, and takes it out on the water. He disembarks to explore another part of the castle, and Steerpike steals the canoe. He doesn’t realize it, but Titus sees him make off with it and thus knows where hides. Titus returns to his mother, telling her he knows where the murderer can be found. Meanwhile, Fuchsia falls, hits her head, and is drowned.

When the news of Fuchsia’s death arrives, Titus is so enraged that he sets off at once to find and kill Steerpike, who he connects with the death. 100 boats accompany him as they surround Steerpike’s hiding spot. They surround the man, and he desperately tries to escape. The mob loses him in a patch of thick ivy, but Titus sees movement there and dives out a window and into the ivy. He finds Steerpike and stabs him, gets cut along the face, and then stabs again, killing the murderer.

His heroism becomes legendary among the castle, and as the flood waters finally begin to recede, life returns to some sort of normalcy. Titus, however, still yearns for freedom. He tells his mother they he will leave Gormenghast. She responds "'There is nowhere else, ' it said. 'You will only tread a circle, Titus Groan. There's not a road, not a track, but it will lead you home. For everything comes to Gormenghast. '" (p. 555 It is her voice in this quote).