In 1775, a man flags down the nightly mail-coach on its route from London to Dover. The man is Jerry Cruncher, an employee of Tellson's Bank in London; he carries a message for Jarvis Lorry, a passenger and one of the bank's managers.

Lorry sends Jerry back to deliver a cryptic response to the bank: "Recalled to Life." The message refers to Alexandre Manette, a French physician who has been released from the Bastille after an 18-year imprisonment.

Once Lorry arrives in Dover, he meets Dr. Manette's daughter Lucie and her governess, Miss Pross. Lucie has believed her father to be dead, and faints at the news that he is alive; Lorry takes her to France to reunite with her father.

In the Paris neighbourhood of the Faubourg Saint-Antoine, Dr. Manette has been given lodgings by his former servant Ernest Defarge and his wife Therese, owners of a wine shop.

Lorry and Lucie find him in a small garret, where he spends much of his time making shoes – a skill he learned in prison – which he uses to distract himself from his thoughts and which has become an obsession for him.

He does not recognise Lucie at first but does eventually see the resemblance to her mother through her blue eyes and long golden hair, a strand of which he found on his sleeve when he was imprisoned. Lorry and Lucie take him back to England.

In 1780, French émigré Charles Darnay is on trial for treason against the British Crown.

The key witnesses against him are two British spies, John Barsad and Roger Cly, who claim that Darnay gave information about British troops in North America to the French.

Under cross-examination by Mr. Stryver, the barrister defending Darnay, Barsad claims that he would recognise Darnay anywhere.

Stryver points out his colleague, Sydney Carton, who bears a strong resemblance to Darnay, and Barsad admits that the two men look nearly identical. With Barsad's eyewitness testimony now discredited, Darnay is acquitted.

In Paris, the hated and abusive Marquis St. Evrémonde orders his carriage driven recklessly fast through the crowded streets, hitting and killing the child of Gaspard in Saint Antoine.

The Marquis throws a coin to Gaspard to compensate him for his loss. Defarge, having observed the incident, comes forth to comfort the distraught father, saying the child would be worse off alive. This piece of wisdom pleases the Marquis, who throws a coin to Defarge also. As the Marquis departs, a coin is flung back into his carriage.

Arriving at his country château, the Marquis meets his nephew and heir, Darnay. Out of disgust with his aristocratic family, the nephew has shed his real surname (St. Evrémonde) and anglicised his mother's maiden name, D'Aulnais, to Darnay.

That night, Gaspard, who followed the Marquis to his château by riding on the underside of the carriage, stabs and kills him in his sleep. Gaspard leaves a note on the knife saying, "Drive him fast to his tomb. This, from JACQUES." After nearly a year on the run, he is caught and hanged above the village well.

In London, Darnay asks for Dr. Manette's permission to wed Lucie, but Carton confesses his love to Lucie as well. Knowing she will not love him in return, Carton promises to "embrace any sacrifice for you and for those dear to you". Stryver considers proposing marriage to Lucie, but Lorry talks him out of the idea.

On the morning of the marriage, Darnay reveals his real name and family lineage to Dr. Manette, a detail he had been asked to withhold until that day.

In consequence, Dr. Manette reverts to his obsessive shoemaking after the couple leave for their honeymoon. He returns to sanity before their return, and the whole incident is kept secret from Lucie. Lorry and Miss Pross destroy the shoemaking bench and tools, which Dr. Manette had brought with him from Paris.

As time passes in England, Lucie and Charles begin to raise a family, a son (who dies in childhood) and a daughter, little Lucie. Lorry finds a second home and a sort of family with the Darnays.

Stryver marries a rich widow with three children and becomes even more insufferable as his ambitions begin to be realised. Carton, even though he seldom visits, is accepted as a close friend of the family and becomes a special favourite of little Lucie.

In July 1789, the Defarges help to lead the storming of the Bastille, a symbol of royal tyranny. Defarge enters Dr. Manette's former cell, "One Hundred and Five, North Tower," and searches it thoroughly. Throughout the countryside, local officials and other representatives of the aristocracy are dragged from their homes to be killed, and the St. Evrémonde château is burned to the ground.

In 1792, Lorry decides to travel to Paris to collect important documents from the Tellson's branch in that city and place them in safekeeping against the chaos of the French Revolution. Darnay intercepts a letter written by Gabelle, one of his uncle's servants who has been imprisoned by the revolutionaries, pleading for the Marquis to help secure his release. Without telling his family or revealing his position as the new Marquis, Darnay sets out for Paris.

Shortly after Darnay arrives in Paris, he is denounced for being an emigrated aristocrat from France and jailed in La Force Prison. Dr. Manette, Lucie, little Lucie, Jerry, and Miss Pross travel to Paris and meet Lorry to try to free Darnay. A year and three months pass, and Darnay is finally tried.

Dr Manette, viewed as a hero for his imprisonment in the Bastille, testifies on Darnay's behalf at his trial. Darnay is released, only to be arrested again later that day. A new trial begins the following day, under new charges brought by the Defarges and a third individual who is soon revealed as Dr Manette.

He had written an account of his imprisonment at the hands of Darnay's father and hidden it in his cell; Defarge found it while searching the cell during the storming of the Bastille.

While running errands with Jerry, Miss Pross is amazed to see her long-lost brother Solomon, but he does not want to be recognised in public. Carton suddenly steps forward from the shadows and identifies Solomon as Barsad, one of the spies who tried to frame Darnay for treason at his trial in 1780.

Jerry remembers that he has seen Solomon with Cly, the other key witness at the trial, and that Cly had faked his death to escape England. By threatening to denounce Solomon to the revolutionary tribunal as a Briton, Carton blackmails him into helping with a plan.

At the tribunal, Defarge identifies Darnay as the nephew of the dead Marquis St. Evrémonde and reads Dr Manette's letter. Defarge had learned Darnay's lineage from Solomon during the latter's visit to the wine shop several years earlier. The letter describes Dr Manette's imprisonment at the hands of Darnay's father and uncle for trying to report their crimes against a peasant family.

Darnay's uncle had become infatuated with a girl, whom he had kidnapped and raped; despite Dr. Manette's attempt to save her, she died. The uncle killed her husband by working him to death, and her father died from a heart attack upon being informed of what had happened. Before he died defending the family honour, the brother of the raped peasant had hidden the last member of the family, his younger sister.

The Evrémonde brothers imprisoned Dr. Manette after he refused their offer of a bribe to keep quiet. He concludes his letter by condemning the Evrémondes, "them and their descendants, to the last of their race." Dr. Manette is horrified, but he is not allowed to retract his statement. Darnay is sent to the Conciergerie and sentenced to be guillotined the next day.

Carton wanders into the Defarges' wine shop, where he overhears Madame Defarge talking about her plans to have both Lucie and little Lucie condemned. Carton discovers that Madame Defarge was the surviving sister of the peasant family savaged by the Evrémondes.

At night, when Dr. Manette returns, shattered after spending the day in many failed attempts to save Darnay's life, he falls into an obsessive search for his shoemaking implements. Carton urges Lorry to flee Paris with Lucie, her father, and Little Lucie, asking them to leave as soon as he joins.

Shortly before the executions are to begin, Solomon sneaks Carton into the prison for a visit with Darnay. The two men trade clothes, and Carton drugs Darnay and has Solomon carry him out. Carton has decided to be executed in his place, taking advantage of their similar appearances, and has given his own identification papers to Lorry to present on Darnay's behalf. Following Carton's earlier instructions, the family and Lorry flee to England with Darnay, who gradually regains consciousness during the journey.

Meanwhile, Madame Defarge, armed with a dagger and pistol, goes to the Manette residence, hoping to apprehend Lucie and little Lucie and bring them in for execution. However, the family is already gone and Miss Pross stays behind to confront and delay Madame Defarge. As the two women struggle, Madame Defarge's pistol discharges, killing her and causing Miss Pross to go permanently deaf from noise and shock.

The novel concludes with the guillotining of Carton. As he is waiting to board the tumbril, he is approached by a seamstress, also condemned to death, who mistakes him for Darnay (with whom she had been imprisoned earlier) but realises the truth once she sees him at close range.

Awed by his unselfish courage and sacrifice, she asks to stay close to him and he agrees. Upon their arrival at the guillotine, Carton comforts her, telling her that their ends will be quick but that there is no Time or Trouble "in the better land where ... [they] will be mercifully sheltered", and she is able to meet her death in peace. After Carton tearfully hears the execution of the seamstress, his final thoughts flash in his mind as he is pushed towards the slot where the blade would fall.