Oliver Twist begins with the birth of a baby boy in a workhouse in a town some 70 miles outside London in the 1820s. The boy's mother dies, leaving her son to be raised by the parish. Named Oliver Twist by the parish beadle, a minor official who helps oversee the orphanage, the boy grows up ragged and undernourished at a baby farm, a place where a fee is paid for the ongoing care of babies and children. At age nine he returns to the workhouse, where he picks oakum, unraveling strands from old ropes to earn his keep. One day after Oliver dares to ask for more gruel, the astonished workhouse board decides to find him an apprenticeship.
Oliver is apprenticed to the local undertaker, who trains him to be a professional mourner at children's funerals. This promotion earns Oliver the ill will of the undertaker's older apprentice, Noah Claypole. One day Noah picks a fight with Oliver and ends up getting knocked down. Noah tells the workhouse board that Oliver tried to kill him, the serving girl, and the undertaker's wife, and claims Oliver threatened to kill the undertaker. Oliver decides to leave town before he falls back into the board's clutches.
Seven days later Oliver reaches London, where he meets Jack Dawkins. Jack introduces Oliver to Fagin, an old man who provides room and board to boys in return for their work. At first Oliver believes the boys make handkerchiefs and pocketbooks and thinks Fagin must be a very generous man to help them. But two of the boys take Oliver out one day, and he is shocked to see them pick a gentleman's pocket. They run off, leaving Oliver to take the blame.
Oliver goes before a magistrate, but a witness exonerates him. During the trial Oliver passes out from fever. The pickpocketing victim, Mr. Brownlow, takes Oliver home with him, where he notices the boy resembles a portrait of a woman hanging in his house. Oliver is happy and grateful to Mr. Brownlow and his housekeeper, Mrs. Bedwin. Oliver recovers, only to be sent on an errand, recaptured, and returned to Fagin.
Egged on by a mysterious associate named Monks, Fagin concocts a plan to draw Oliver into a life of crime, and his plan seems to be going well. Unbeknownst to Fagin, though, Oliver longs to return to Mr. Brownlow and Mrs. Bedwin. It looks as if his hopes will be dashed when Bill Sikes takes Oliver to help out with a burglary. He needs a very small boy to fit through a tiny window and open the front door. Just after Oliver enters the house, the inhabitants wake up and discover him, and Oliver is shot. Sikes carries him away, but he is forced to leave the boy unconscious in a ditch.
When Oliver comes to, he makes his way to the very house where he was shot. There, Mrs. Maylie—the owner of the house—and her niece, Rose, nurse him back to health with the help of the local doctor, Mr. Losberne. The boy tells them his life's story, and all three dedicate themselves to helping him.
The Maylies take Oliver to live in their country cottage, where he grows strong and healthy. Rose, however, takes ill. Oliver goes to post a letter to Mr. Losberne asking for his help and, while on this errand, bumps into a stranger. Later Oliver sees Fagin and the stranger outside his window.
Monks meets with Mr. Bumble and his wife, who is the workhouse matron. She shows Monks a locket that was stolen from Oliver's mother's corpse. Monks buys the locket and throws it in the river. In the meantime Fagin has acquired a new member for his gang: Noah Claypole. Noah earns his keep by stealing from children and spying for Fagin.
Rose, Mrs. Maylie, Oliver, and Mr. Losberne are in London when Nancy comes to Rose's hotel room and tells her that she overheard Fagin talking with Monks and that Monks called Oliver his brother. Rose takes Oliver to see Mr. Brownlow and tells the old gentleman what she learned from Nancy. Rose and Mr. Brownlow later meet Nancy near London Bridge, where they ask her to turn in Fagin's gang. She refuses. The meeting is overheard by Noah Claypole, who reports back to Fagin.
Fagin tells Bill Sikes that Nancy has ratted out the gang, and Bill goes into a fury and kills her. He then goes on the run, and, in trying to escape from pursuers, falls from a roof with a noose around his neck and hangs himself. Based on evidence from Noah Claypole, Fagin is arrested, tried as an accomplice to murder, and sentenced to hang.
Mr. Brownlow captures Monks, gets him to disclose all his machinations against Oliver, and has him sign a confession. It turns out that Oliver's mother was the great love of Monks's father, who was Mr. Brownlow's close friend. Monks's father had hoped to marry Oliver's mother, but he took ill and died before he could do so. He had written a will leaving most of his money to Oliver, but Monks's mother made sure it was never found. Oliver finally receives his inheritance, Mr. Brownlow adopts him, and Oliver and his friends all end up living happily in a country village.