The story begins as Lennie and George are about to arrive at a ranch near Soledad, California. Previously, they had been chased out of another town, Weed, because Lennie had accidentally given the appearance that he was attempting to molest a young girl. The basic characterization of George and Lennie starts near a stream when George speaks to Lennie about not getting into trouble. He also tells about their dream of owning their own farm, and having control over their lives.
The next morning they arrive at the ranch and start working. They meet Candy, the Boss, Curley, Curley's wife, Slim, and a few other ranch hands. That night one of the workers, Carlson, tries to convince Candy to have his old dog shot to put it out of its misery, but really just wants it to stop stinking out the bunkhouse. After Slim "passes verdict" on the issue, Candy reluctantly agrees, but it is evident he is very unhappy.
Later, he tells George he should have shot the dog himself. Then Curley comes in, looking for his wife. He almost gets into a fight with Slim, but instead attacks Lennie, because he dislikes him for his size. At first Lennie doesn't even defend himself, but George tells him to fight back,so he crushes Curley's hand, this shows us the strength of Lennie. Curley agrees to pretend he got it caught in a machine so he isn't embarrassed by his loss to the simple-minded Lennie, and is taken to a doctor.
The next day after some work Candy hears of George and Lennie's plan to buy their own farm, and offers a large sum of the money needed in exchange for a place to live there, as he will probably soon be fired since he lost his hand. Suddenly the dream is much closer, and the three become excited. That night, when most of the men have gone into town, Lennie childishly stumbles into Crooks' room. Crooks first tells him to leave, but then allows him to sit down and tries to get Lennie to see the terrible life he has as a black man. When Candy joins them, Crooks too says he may help on the new farm. However, Curley's wife interrupts the meeting and threatens Crooks, reminding him of his place in society.
The third day is not a working day, so most of the men are engaged in a horseshoe tournament. Lennie is in the barn, playing with a puppy Slim gave him. He accidentally kills it, and fears George's anger. Curley's wife finds him there, and tries to start a conversation. When Lennie touches her soft hair, she becomes frightened, and as he tries to keep her quiet, he accidentally kills her. Lennie runs back to the stream introduced in the first scene where George had told him to go in case of trouble. Candy discovers the body and tells George. They both know Lennie must be captured and the dream has been shattered. The rest of the men are told of Curley's wife's death and go looking for Lennie. George finds Lennie at the meeting spot, and gently tries to calm him. Then, to prevent the others from killing Lennie, he does it himself, shooting him just like Carlson shoots Candy's dog.
The title of the book comes from a line in a 1785 poem "To a Mouse" by Robert Burns ("The best-laid schemes o' mice an 'men/Gang aft agley" [i.e., "So often go awry"]). This idea of unforeseeable failure applies to Lennie, George, and Candy's plan to buy a farm on which Lennie will tend rabbits. Lennie is killed by George at the end of the book, for Lennie's own good, because 1) George thinks that Lennie will do other bad stuff, 2) George knows that Curley and his men will kill Lennie anyway because Lennnie killed Curley's wife and 3) George is doing it now, without Lennie having any pain or without him knowing this is the end.