The title announces that the speaker of the story, Francis Wayland Thurston, has perished, and that what follows has been found among his papers. Thurston informs the reader that he is the executor of his late grand-uncle's estate, a retired professor at Brown University named George Gammell Angell. Among Angell's possessions, Thurston finds a locked box that contains an odd clay bas-relief, and a two-part manuscript entitled "CTHULHU CULT." Thurston studies the bas-relief sculpture, which features the outline of a figure that looks like an octopus, dragon, and human combined.
In the first part of Angell's manuscript, Thurston learns how a sculptor from the Rhode Island School of Design named Henry A. Wilcox once showed up in Angell's office with the sculpture, speaking of strange dreams he had after an earthquake on March 1st. On the night of March 22nd, Wilcox becomes feverish and deliriously imagines "Cyclopean cities" and a gigantic monster "miles high." Thurston finds addenda to the manuscript that prove that Angell started recording the dreams of other participants at this time, finding poets and artists to be the most likely to have experienced the same visions as Wilcox. He also finds news clippings that record instances of worldwide hysteria and unrest on March 22nd.
Thurston then recounts the second part of Angell's manuscript, noting that only Angell, not Wilcox, knew the true import of Wilcox's dreams. This document contains Angell's notes from a meeting of the American Archaeological Society in St. Louis in 1908, where a man named John Raymond Legrasse produced a similar statuette, obtained in a raid on a voodoo ritual in Louisiana, to a panel of befuddled experts. However, one named William Channing Web, attests to having encountered the idol among Inuit rituals in West Greenland. Webb's phonetic transcriptions of these rituals, compared alongside Legrasse's, reveal the phrase, "In the house of R'lyeh dead Cthulhu waits dreaming."
Legrasse reveals to Angell and the others that as a member of the New Orleans police the previous year, he was tasked with responding to reports of kidnapping and murder in a rural outpost in the southern Louisiana swamp. Locals directed the policemen into an area of the swamp widely considered to be dangerous and cursed, where they heard the sounds of chanting and tom-toms. The men find a mass voodoo ritual, with dozens of men dancing among burning human remains arranged around an eight-foot effigy of the creature from Wilcox's bas-relief. Out of the many cultists that are apprehended, Legrasse finds the testimony of a lucid elder named Old Castro most compelling. Old Castro talks about "Old Ones" of interstellar origins that once resided in great Cyclopean cities, and which now slumber beneath the oceans, waiting to be activated by a chance confluence of astrological and human affairs.
After reading the document, Thurston visits Wilcox in the present day, finding him a successful decadent sculptor who still remembers the word "Cthulhu" from his dreams. In Louisiana, Thurston interviews the remaining prisoners from Legrasse's raid, and becomes convinced that this far-flung, secretive belief system is of genuine anthropological note. He also openly wonders whether knowing too much about it has precipitated his grand-uncle's death—and whether it will occasion his own.
Some months later, Thurston endeavors to forget his Cthulhu cult investigation, until he finds a Sydney Bulletin article in a museum of Paterson, New Jersey, that features a photograph of the same stone idol from Wilcox's dreams. The article reports that near New Zealand on April 18th, 1925, a freighter named Vigilant had towed in a disabled yacht named the Alert with one corpse and one survivor aboard, with the latter in possession of the idol. The survivor, named Gustav Johansen, alleges approaching the Alert on his ship the Emma, at which point the Emma was ordered to turn back and subsequently attacked. Johansen and his men abandoned the bombarded Emma, successfully subdued the Alert's hostile crew, and navigated the ship to a small island where six of Johansen's men died. Locals in the article also mention that the Alert, a seedy and infamous vessel, set sail hastily after an earthquake on March 1st.
An increasingly-panicked Thurston pieces together that the same earthquake that triggered Wilcox's dreams also set the Alert cruising toward some unholy destination. Thurston travels to New Zealand, and finds Johansen's idol in a museum, where Thurston reevaluates its geologically-foreign origins in light of Old Castro's words about the stars. He then travels to Norway to interview Johansen directly, but finds out from his widow that he is dead—possibly murdered. Johansen's widow bequeaths Johansen's personal diary to Thurston, who reads it to learn that Johansen and his men actually encountered an otherworldly monolith on the Alert. Johansen's account describes a vast door on the monolith opening, and a horrific creature lurching out to lay waste to the men, two of whom die of shock on the spot.
Thurston reads on as Johansen describes frantically navigating the Alert away from the island, and Cthulhu's pursuit, with one other companion, who eventually succumbs to madness and dies. Johansen only escapes by sharply U-turning the ship so that it strikes the beast, causing an explosive cloud to shower over the ship and recede. Thurston fears that reading Johansen's diary has now made him a target of the Cthulhu cult, following the mysterious circumstances of Johansen and Angell's deaths. He prays that he will not suffer a similar fate, and begs the executor of his estate to conceal his own papers from the eyes of others.
