The story focuses on a human raised on Mars and his adaptation to, and understanding of, humans and their culture, which is portrayed as an amplified version of consumerist and media-driven 20th-century America.

Valentine Michael Smith is the son of astronauts from the first expedition to the planet Mars. Orphaned after the entire crew died, Smith was raised in the culture of the Martian natives, beings with full control over their minds and bodies (learned skills which Smith acquires).

A second expedition to the planet some twenty years later brings Smith "home" to Earth. Since he is heir to the fortunes of the entire exploration party, which includes several valuable inventions, Smith becomes a political pawn in government struggles.

Since Smith is unaccustomed to the atmosphere and gravity of Earth, he is confined at Bethesda Hospital. Having never seen a human female, Smith is attended by male staff only. Seeing this restriction as a challenge, Nurse Gillian Boardman eludes guards to see Smith and in doing so inadvertently becomes his first female "water brother" by sharing a glass of water with him. To him, this is a holy relationship based on the customs of arid Mars.

Gillian tells reporter Ben Caxton about her encounter with Smith, and they, together with Jubal Harshaw, a famous author who writes under several names, try to counteract the government's lies about Smith. Gillian persuades Smith to leave the hospital with her, but they only get as far as Ben's apartment before agents attempt to kidnap them. Smith causes the agents to disappear, and he is so shocked by Gillian's terrified reaction that he enters what seems to be a catatonic state.

Smith continues to demonstrate psychic abilities and superhuman intelligence coupled with a childlike naïveté. When Jubal tries to explain religion to him, Smith understands the concept of God only as "one who groks", which includes every living person, plant, and animal. This leads him to express the Martian concept of the oneness of life as the phrase "Thou art God". Many other human concepts—such as war, clothing, and jealousy—are strange to him, while the idea of an afterlife is something he takes as a given because the government on Mars is composed of "Old Ones", the spirits of Martians who have died. It is also customary for loved ones and friends to eat the bodies of the dead, in a spirit of Holy Communion.

Eventually Harshaw brokers a deal which includes freedom for Smith and recognition that human law, which would have granted ownership of Mars to Smith, has no applicability to a planet already inhabited by intelligent aliens.

Now free to travel, Smith becomes a celebrity, and is feted by elite of Earth. He investigates the Fosterite Church of the New Revelation, a populist megachurch where sex, gambling, drinking and other earthly pleasures are not considered sinful but encouraged, even within the church building. The church is organized in a complexity of initiatory levels; an outer circle, open to the public; a middle circle of ordinary members who support the church financially; and an inner circle of the "eternally saved" — attractive, highly sexed men and women, who serve as clergy and recruit new members. The Church owns many politicians and takes violent action against those who oppose it. Smith also has a brief career as a magician in a carnival where he and Jill share water with the tattooed lady in the show, an "eternally saved" Fosterite woman named Patricia Paiwonski. Eventually Smith starts a Martian-influenced "Church of All Worlds," which teaches its members how to rise above suffering.

Smith's church combines elements of the Fosterite cult (especially the sexual aspects) with mystery religions and initiation. Members learn the Martian language and acquire psychic abilities. The church is eventually besieged by Fosterites for practicing "blasphemy" and the church building is destroyed. However, Smith and his followers teleport to safety. Smith is arrested by the police but he escapes by disintegrating the prison walls and he returns to the hotel where his followers are staying. Smith explains to Jubal that his gigantic fortune has been bequeathed to the Church. With it and their paranormal abilities, Church members will be able to take over the world and reshape human societies and cultures. Smith leaves the hotel to confront the crowd, instead of performing large miracles he simply tries to talk to the mob, but they attack and brutally kill him, while he does not try to heal himself.

The book ends with Jubal and some of the Church members returning to Jubal's home, while Smith is promoted to another plane of existence.