Diedrich Knickerbocker, an old New York gentleman with an interest in the histories and stories told by the descendants of Dutch settlers in New York in the early 19th century, narrates the story of a simple, good-natured man named Rip Van Winkle, who lives in a small village in the Catskills. Though Rip comes from a family full of chivalrous and militaristically successful men, he is unconcerned with such things and is chiefly occupied with shirking his duties to his home and family and avoiding his nagging wife, Dame Van Winkle. He spends most of his day out of the house with his dog Wolf, where his wife can’t reach him as easily, either talking with townspeople at the inn, hunting squirrels, fishing, or helping on farms other than his own.
One day Dame Van Winkle is so persistent in her haranguing pursuit of Rip that he flees to the woods with his gun and dog. He absently follows a squirrel high into the Catskill Mountains and ends up taking a nap. Just as the day’s light is fading and Rip is preparing to go back down the mountain, he encounters a stranger. The stranger is holding a stout keg on his back, and Rip, drawn by some mysterious force, helps the stranger carry the keg to the top of the mountain, where he finds strange men wearing antiquated clothing playing ninepins (these men are the spirits of Hendrick Hudson and the crew of the Half Moon, though Rip doesn’t know that). Rip is instructed to serve them a drink that is so enticing that Rip secretly tastes some himself, and then consumes it immoderately and falls into a deep sleep on the mountain.
When Rip wakes up he assumes he has slept through the night, and worries about the backlash he will face from Dame Van Winkle. But soon it becomes apparent that something strange has happened. The gun by his side is an old and rusty one, and his beard is now a foot long. His joints are stiff, and he finds it difficult to climb the mountain. He tries to locate the peak on which he fell asleep but cannot find it. Wolf is also nowhere to be found, and after searching for him as long as he could, Rip apprehensively descends the mountain with the rusty gun, dreading his reunion with his wife. Though the path is nowhere to be found and the landscape is strange, Rip successfully makes his way back to the village.
On the outskirts of the village a group of children—none of whom are familiar to Rip—chase after him and point at his beard. Rip notices that the village is now larger and more populated. New houses line the roads and unfamiliar faces peer out at him from windows. Perplexed, Rip finds his old house. He expects to hear his wife yelling at him shrilly, but never does. What’s more, his house is dilapidated, as though no one has tended to it in a very long time. He sees a dog that resembles Wolf, but the dog is dirty and emaciated, and does not recognize Rip. He goes to the inn to look for his old friends and finds in its place the Union Hotel.
Rip introduced himself to the strangers at the hotel as a “loyal subject of the king” but this is met with outrage. He discovers that 20 years have passed since he went up the mountain. The American Revolution has taken place. His friends and neighbors Nicholas Vedder and Brom Ducher are dead, and Derrick Van Bummel is working in the newly established American Congress. His son Rip Van Winkle Jr. has grown up to be just like his father, and his daughter Judith has married and has a child (Rip Van Winkle III). The townspeople come to believe Rip’s story on the mountain after his tale is corroborated and explained by the oldest man in town, Peter Vanderdonk, and the townsfolk eventually turn their attention back to the upcoming presidential election. Rip moves in with his daughter and spends the rest of his days living as he did prior to his disappearance, only now he has no need to fear his wife’s intrusion and lives freely and peacefully.