Winter's Tale has four parts. The first is set in the late 1800s in New York City, with many facets taking on a surreal quality. Machines are described as having animal characteristics, as if they are living beings. A mysterious cloud wall ebbs and flows out in the bay. People who enter the cloud disappear; no one knows where they go. In this strange version of New York City lives Peter Lake, a burglar and general rapscallion.
In a flashback, Peter's immigrant parents set him adrift as a baby after they were refused entry into the country. A race of people called the Baymen find him. They live in the marshes surrounding the city and raise Peter in this primitive culture, but they send him away when he is 12 to make a future for himself in New York City. Peter ends up in a home for lunatic boys run by Rev. Overweary and two other men: the Deacon and Rev. Mootfowl. Rev. Overweary rents out the boys as unskilled laborers and keeps their wages, thus allowing him to live in luxury, while the boys, if they survive, leave the home as adults with nothing. Rev. Mootfowl teaches the boys about engines, gears, electricity and mechanics. His boys become sought-after experts in most any kind of machinery. Peter becomes Mootfowl's best apprentice and spends many years under his tutelage.
When Jackson Mead, a brilliant but enigmatic engineer, gives Mootfowl and his boys a chance to bid to help him build a new bridge, Mootfowl is overjoyed. But when Mead demands that Cecil, Mootfowl's least capable assistant, build a complex iron piece, the boy fails. Mead refuses to give Mootfowl the position he craves.
The reverend falls into depression, and weeks later, he arranges his suicide with Peter as an unwitting accomplice. Peter knows that he will be blamed, and he escapes from the home to hide in the streets. Cecil follows.
The two become partners. One night, they encounter Pearly Soames who insists that Cecil and Peter join the Short Tails. For several years, things go surprisingly well, until Pearly hatches a plan to steal gold off one of the barges. To do so, he has to take over the area where the Baymen live. He plans on leading the Short Tails in a surprise attack and killing all the Baymen. Peter warns them so they are armed and ready to fight. Cecil is swallowed into the cloud wall, and Pearly deduces that it was Peter who warned the Baymen and vows to kill him.
Peter uses a mythical white horse, Athansor, to help him evade Pearly and the Short Tails. As Peter rides, the horse appears to grow in size and power until it jumps so high and far, it seems to fly. One night he mounts the horse in a stable and retires to his hideout in the ceiling of Grand Central Station. The constant running has worn Peter down — he is almost 30 and wants a new life. He decides he must steal enough money so he and his horse can start over elsewhere.
Beverly is a young woman, dying of consumption. Her father, Isaac Penn, is a millionaire and publisher of The Sun, one of New York's finest newspapers. While robbing the Penn townhome. Peter meets Beverly. The two begin a relationship, and Beverly insists on bringing him to the Lake of Coheeries, where her family is vacationing.
Isaac Penn questions Peter, and he admits everything. Although he is a thief, Peter would rather be a mechanic. Though he is poor, he no longer desires Penn's money. For the moment he wants only to love Beverly and make her happy for as long as she has to live. The family welcomes Peter.
When they return to New York City, Peter runs into Cecil, whom he thought had died in the cloud wall. Cecil doesn't elaborate on what happened, only that he is back working with Jackson Mead and Rev. Mootfowl. Then he disappears into the city crowd.
Beverly dies a few months after the turn of the century, and her father dies soon after. The rest of her siblings scatter, and Peter returns to life on the streets — alive, but wishing he could join Beverly in death. Peter and Athansor take refuge in a cellar. Peter dreams of Beverly radiating in a bright, white light. She bridles Athansor in stars and leads him to Peter before disappearing and leaving him in darkness. As he dreams, Pearly Soames and thousands of Short Tails surround the cellar. After a brutal assault, Peter has no choice but to make Athansor jump from a bridge into the cloud wall. Sounds of screaming and tormented voices fill the air. Peter and the horse fly into an infinite black space full of stars, just as Beverly had shown him in his dream. Peter realizes he will die without air, and so he lets go of Athansor and tumbles downward into the cloud.
The second part is set in the late 1900s in the Lake of Coheeries, a mysterious section of upstate New York. Mrs. Gamely, her daughter, Virginia, and grandson, Martin, are braving a horrible winter storm with 200-mile-per-hour winds. The wind freezes the lake into a solid sheet of glass, foretelling a long, hard winter. But the lake's beauty calls the villagers to revel for the two weeks of fine weather following the storm.
Soon enough, winter rages again, and Mrs. Gamely and her family begin to starve. Virginia dreams about a city and takes it as a sign she and Martin should go to New York City. With her mother's blessing, she and Martin begin the trek south. They arrive frozen and starving and end up in Grand Central Station. While looking in a restaurant window, Virginia catches the eye of Jessica Penn, Beverly's niece. Jessica invites Virginia to eat with her and her party, members of The Sun's staff.
Virginia impresses them with her fine education, general knowledge and use of language. When questioned about the Lake of Coheeries, Virginia hints that the area has something to do with the cloud wall. The wall still exists, but in this more modern world, no one sees it or understands it anymore. The Sun hires her to write a column about the city.
In San Francisco, the wealthy Vittorio Marratta dies. Hardesty, his younger son, inherits a simple, golden tray. A word is inscribed on each side of the tray: honesty, courage, justice and sacrifice. A phrase is engraved in the middle asking what could be more beautiful than a perfectly just city. Hardesty takes the salver and leaves San Francisco by train in search of the just city.
The train becomes stuck in snowdrifts by Lake of Coheeries. The villagers rally to the rescue and shelter the passengers in their homes until the train can be dug out. Hardesty stays with Mrs. Gamely. In gratitude, he agrees to find Virginia and deliver a letter to her. Once in New York City, he has no clue how to find Virginia. He wanders the streets until he comes upon the Coheeries Theater. Along the wall is printed the same quote as on his father's gold tray.
Hardesty finds the Penn archives and discovers pictures of Beverly, Isaac and the family. Peter Lake is in some of the pictures but is unnamed. Hardesty tries to locate a Penn family member in hopes of getting a clue as to Virginia's whereabouts. At the offices of The Sun he is introduced to her. They immediately fall in love. He dines at her apartment that night. Both have come to believe that the harsh winters are a portent of some drastic change. They think the new millennium will be different somehow.
Hardesty feels pulled to search Europe for the just city. He tells Virginia he must leave and buys a ticket for an ocean liner. On his way to the dock, he stops to breakfast with a friend who engages Hardesty long enough in conversation that he misses the boat, but Hardesty jumps in after it. To his friend's amazement, the boat stops dead in the water. Hardesty swims out to it, and they lift him aboard. He soon regrets his decision when he sees the cloud wall blocking the ship's passage.
No one but Hardesty has an inkling as to what might be on the other side of the cloud wall, and he doesn't want to travel into it because he knows he probably won't see Virginia again. As the cloud consumes the ship, Hardesty flees. The cloud touches him, propelling him to ecstasy, but he jumps overboard. When he breaks the surface, the ship and the cloud wall are gone. Eventually a boat comes by, and its pilot, a man named Asbury, picks him up. Hardesty offers Asbury his apartment, as he plans on marrying Virginia. She is overjoyed at his return.
A beautiful young woman named Christiana heads for New York City after her father dies. She recalls from her childhood meeting a giant white horse. It appeared to be stuck in the surf. She went out to it and climbed on its back. At first he flew into the air to try to shake her off, then dove deep into the water. When Christiana wouldn't let go, the horse carried her to shore. After drying off, she watched the great beast fly away.
One night Christiana and some friends visit the poor section of the city. Noticing a crowd gathering, they investigate. Inside a crude stadium, horses are led out to fight armed men to the death. Several are slaughtered before they lead out the white horse from Christiana's childhood. The horse is massive and powerful, seeming to fly about the arena and killing all those who attack it. Christiana becomes consumed with the thought of returning to find the white horse. The evening also forces her to realize the depravity of the man she is with. She runs away and finds an apartment which happens to be next door to Asbury.
Christiana and Asbury begin talking through their common walls, spending hours discussing all kinds of subjects. Although they've never seen each other, they fall in love. Asbury asks her to marry him. She says she's a very plain woman, but he tells her he doesn't care. His friend Hardesty tries to dissuade him from the marriage, but Asbury is unmoved. He and Christiana meet weeks later. Upon seeing Christiana for the first time, Asbury exclaims that he knew she would be the most beautiful woman in the world.
The third section begins with the approaching millennium. After a string of very warm winters, a major freeze hits New York City. Peter Lake makes a startling reappearance in the freezing waters and is picked up by a ferry. He has no memory of who he is or from where he came. The wounds from his fight with the Short Tails are fresh, and he is taken to a hospital where he slips into unconsciousness. When he wakens, he doesn't realize he's traveled through time. When he views the city's landscape, however, he understands things have changed. He recovers miraculously from his wounds and again takes to the streets.
At first, he lives as a derelict, trying to make sense of what has happened. One night he approaches the gate of a restaurant and stares in at Harry Penn and his employees eating dinner. Penn and his sister don't recognize Peter because he is unshaven and wearing ratty clothing. Peter still has no memory of his past and so doesn't speak to his wife's family. He eventually wanders off, leaving the others perplexed at his appearance. The arrival of a gigantic ship interrupts their contemplation. Larger than any ocean liner, the ship anchors in the river. No one leaves, and no one is allowed on. For weeks the people of New York City, especially Harry Penn and his staff, are left to wonder at who or what could be aboard.
While wandering the streets, Peter Lake comes to the offices of The Sun. He stares into the windows at the ancient presses. Several mechanics are baffled, unable to get the machines to work. Peter suddenly realizes he can fix them. He asks the men to let him try. As a joke, they let him and are amazed when he succeeds. They take him on a tour of the machine rooms, and he is able to tell them about the devices that have stumped them for years. They hire him as their chief mechanic.
The mayor of New York is allowed to go on the boat, but he won't tell anyone who or what is on the huge ship. His only comment is that a great opportunity awaits the city. The ship fades from the news, but Hardesty, Virginia, and another reporter, Praeger, keep watch on it through the nights. Finally, after months of waiting, they see it flash a ship-to-shore signal.
They covertly follow a limousine to the Metropolitan Museum of Art. Three men emerge. Their identities are unknown to the reporters, but they are Cecil, Mootfowl and Jackson Mead. Later, as the reporters continue their stakeout, the mayor and Harry Penn arrive. As Mead leaves, the reporters question him. Mead tells them that he's from St. Louis and many other places. Praeger follows Harry Penn home and insists his old friend and employer tell him about the strange men from the ship, but Penn won't.
Hardesty and Praeger are determined to find out about Jackson Mead. They search once-abandoned shipyards and find them bustling. A worker tells them new railway lines are coming, and some men won't touch the buildings because they think they are holy. Praeger tells Hardesty he plans to run for mayor. He feels a great battle will be waged for the heart of the city and vows to lead as it falls and as it rises.
Praeger, Hardesty and Virginia finally confront Jackson Mead. He refuses to be clear about his plans, saying only that he wants to fill the world with rainbows until God turns His eye to the world again and makes life perfect. Mead wants to stop time and bring justice. Praeger is irate at Mead's enigmatic statements and his pompous attitude. He vows to defeat anything Mead intends when he becomes mayor.
The final section of the book opens with a discussion on the infinite qualities of time before again picking up the characters. Peter Lake continues to work as the master machinist, but he often finds himself entranced by the sounds of the machines. It's as if they talk to him, and he goes into a trance. The other machinists don't know what to make of him. They have an apprentice follow Peter. He reports that Peter wanders the city, never sleeps and gets lost in trances, and at some points it seems as if something invisible speaks to him. The boy could hear noises — static, ocean waves and monks chanting — but no words.
Hardesty travels to San Francisco, thinking he might discover clues to Mead's identity. When he comes across a plaque for the Golden Gate Bridge, it mentions something about an eternal rainbow. He also sees a statue of the bridge's builder that looks remarkably like Jackson Mead. Hardesty returns to New York and confronts the mysterious engineer. Mead admits to plans to build a bridge. Hardesty tells him people will fight it. Mead says they have always fought against his plans, but he prevails.
Athansor, the white horse, is now chained to a wheel that he must turn for many hours a day. Pearly Soames has reappeared in the present time, and he frees Athansor because he knows the horse will lead him to Peter Lake.
Hardesty, Virginia and their children take a long-awaited trip back to the Lake of Coheeries. Their horse falls into the ice along the way, but Athansor rescues them and leads them the rest of the way home. After a few lovely days, their daughter becomes deathly ill. They must take her back to the city to receive care from a trained doctor. Pearly and the Short Tails have followed Athansor to the mystical village. They parachute from the sky and block Hardesty's sleigh. Their horse cries out to Athansor who again comes to their aid. He fights off the Short Tails and makes a path for the sleigh. When they reach safety, he heals the wounds of Hardesty's horse.
Peter has a paranormal experience, in which several large men grab him and hurtle him toward the wall of a room. Peter fears they will kill him, but instead, he passes through the wall as if it were air. The beings continue to hurtle him through barriers, eventually even transporting him through the ground so that he sees every person who's ever died and instantly knows how they spent their final moments. After this experience, his mind is partially restored. Although he still has amnesia, the trances have stopped. He finds, however, that he's become a kind of living registrar for the dead. Peter has a vague recollection of Athansor and begins searching for the white horse.
Praeger is elected mayor and tells the citizens of New York City about Jackson Mead's rainbow bridge. Mead will have to destroy neighborhoods and probably people's livelihoods in order to build it, even though it will be made of light.
Harry Penn is introduced to his chief mechanic and recognizes Peter Lake, but Peter can't remember him. Harry gets Praeger to take him to the Penns' abandoned estate in the Lake of Coheeries. When they arrive, they discover the Short Tails have killed the villagers. Harry enters his old home and takes down the portraits of his sister Beverly and Peter Lake. He then sets fire to the mansion before returning to the city with the pictures.
Hardesty, who has been searching for a cure for his dying daughter, sees Peter Lake in Grand Central Station. They recognize each other from their brief encounter at the restaurant. The Short Tails chase them, but Peter finds he now has telekinetic capabilities. He can throw the thugs in the air without touching them. One small Short Tail begs for mercy, and Peter lets him draw close to him. The man asks if Peter has found the horse yet. When Peter says he hasn't, the man laughs and says that it's the horse the Short Tails are afraid of, not Peter. He stabs Peter in the abdomen. Peter throws the man through air. He disappears in a puff of smoke.
Hardesty's young daughter dies, and people begin to riot in defiance of Jackson Mead's plans. Great fires break out, growing into chaos on New Year's Eve. Hundreds of thousands try to flee but flames and rioters entrap them. The power goes out, but Peter Lake works valiantly, even as his wound pours blood, to bring the machines at The Sun back to life, which he eventually does. As he sinks into unconsciousness, he can feel their power surging through him. It is as if he has become the fulcrum Jackson Mead will use to concentrate the energy and light he needs to create his masterpiece.
Harry Penn wakes Peter and tries to get him to remember who he is. He shows Peter the pictures of him and Beverly. Peter's memory returns. He is also certain of what he needs to do next, but not how he will do it. Meanwhile, Mootfowl and Cecil discuss how they really don't want the bridge to succeed, because it will end the world as they know it. Cecil claims it is too late to stop it now; Peter Lake is back and ready to fulfill his purpose.
Peter meets up with Hardesty, Asbury and their families outside of The Sun. They tell him where to find Athansor. Peter Lake wants to retrieve Hardesty's salver and exchange it for the white horse. Peter insists the others dig up the body of Hardesty's daughter because she is going to live again. They go on their separate quests. When Peter finally sees the tray, it seems to be a living thing. Peter leaves the salver outside the stable where Athansor is being kept. Then he rides the white horse through the streets in order to get Pearly Soames' attention.
Jackson Mead throws the switch to channel energy and light into creating his bridge, and for a few minutes, he is successful. Light rises from the city in all directions, diffusing together to form a kind of silver road. After a few minutes, the light begins to shiver and the bridge disappears.
Peter dismounts Athansor and orders the great horse to return to his home. Pearly confronts Peter, eventually showing him the butchered remains of an animal he believes to be Athansor. But then they hear hoof beats thundering, and Peter knows it is the white horse trying to gallop fast enough to fly again. He tells Pearly that he knows what he must do now, and he positions himself under Pearly's sword. Pearly drives his sword through Peter Lake, killing him. At that moment, Athansor takes to the air, disappearing into the white cloud, never to be seen again. The sun rises, and a beam of light strikes Hardesty's salver, still lying outside where Peter had left it. It fills the surrounding courtyard with a golden light.
Hardesty, his family and friends are returning to the city with his daughter's body. As they approach the cloud wall surrounding the city, his daughter returns to life. Hardesty has a vision in which they are all lifted up into the clouds. The city below seems to be alive and holy. All the rivers and bays surrounding New York are now gold.
In an epilogue, we are told that Jackson Mead will try to build a bridge back to the place out of which he'd been cast. The people of New York rebuild their city. Pearly Soames is left in this new city to provide a sense of balance, evil among innocence. It is hinted that Hardesty's daughter, the young girl for whom Peter Lake sacrificed his life, will one day be called to do something similar.