The story features Amy Dorrit, youngest child of her family, born and raised in the Marshalsea prison for debtors in London.

In 1826 Marseille, murderer Rigaud narrates to his prison cellmate John Baptist Cavalletto how he had killed his wife, just prior to being taken to trial.

Businessman Arthur Clennam is detained with other travelers in quarantine in Marseilles and becomes friends with the merchants Mr. and Mrs. Meagles, their daughter "Pet", and their maid, an orphan named Harriet Beadle whom the family has nicknamed Tattycoram.

Tip has recently been imprisoned for his own gambling debts, and Fanny lives outside the prison with William's older brother Frederick.

She works as a dancing girl in the music hall (where Frederick plays the clarinet) and has attracted the attention of the wealthy Edmund Sparkler.

To maintain the honour of her father, who is embarrassed to acknowledge his financial position, Little Dorrit avoids mentioning her work outside the prison or his inability to leave.

When Arthur learns that Mrs. Clennam employs Little Dorrit as a seamstress and shows her unusual kindness, he wonders whether the young girl might be connected with the watch's mystery.

Meanwhile, Rigaud, who has been released for lack of evidence, approaches Mrs. Clennam under the name Blandois and blackmails her and Flintwinch into giving him a place in her business.

After Pet's wedding, the Meagles family suffers a blow when Tattycoram runs away to live with traveler Miss Wade.

Pancks discovers that William Dorrit is the lost heir to a fortune, enabling him to pay his way out of prison and altering the status of the entire family.

They travel over the Alps and take up residence for a time in Venice, and finally in Rome, displaying pride over their new-found wealth and position, hiding their past from new friends.

Later Mr. Clennam's wealthy uncle Gilbert, stung by remorse, left a bequest to Arthur's biological mother and to the youngest daughter of her patron.

After prodding Mrs. Clennam to tell the truth, which she refuses to do, Jeremiah gave the papers with this codicil to the uncle's will to his twin brother on the night that Arthur arrived home.

Unwilling to yield to blackmail by Blandois and with some remorse, the rigid woman rises from her chair and totters out of her house to reveal the secrets to Little Dorrit at the Marshalsea.

Another subplot concerns the Italian man John Baptist Cavalletto, who was the cellmate of Rigaud in Marseilles when jailed for a minor crime.

He makes his way to London, meets up by chance with Clennam – who stands security for him as he builds up his business in wood carving – and gains acceptance among the residents of Bleeding Heart Yard.

The character Little Dorrit (Amy) was inspired by Mary Ann Cooper (née Mitton), whom Dickens sometimes visited along with her family, and called by that name.

It has been shown to be a critique of HM Treasury and the blunders that led to the loss of life of 360 British soldiers at the Battle of Balaclava.

"[6] The American critic Anne Stevenson speaks of Little Dorrit as "a wonderful read – a tragical-comical-satirical-poetical mystery story that turns out to be an allegory of love."

"[7] Little Dorrit was published in 19 monthly instalments, each consisting of 32 pages with two illustrations by Hablot Knight Browne whose pen name was Phiz.

Sandberg with Frederik Jensen as William Dorrit, Gunnar Tolnæs as Clennam, and Karina Bell in the title role.

[10] The fifth adaptation, in 1987, was a UK feature film of the same title as the novel, directed by Christine Edzard and starring Alec Guinness as William Dorrit and Derek Jacobi as Arthur Clennam, supported by a cast of over 300 British actors.

The sixth adaptation was a TV series co-produced by the BBC and WGBH Boston, written by Andrew Davies and featuring Claire Foy (as Little Dorrit), Andy Serkis (as Rigaud/Blandois), Matthew Macfadyen (as Arthur Clennam), Tom Courtenay (as William Dorrit), Judy Parfitt (as Mrs Clennam), and Alun Armstrong (as Jeremiah/Ephraim Flintwinch).

The series aired between October and December 2008 in the UK, in the USA on PBS's Masterpiece in April 2009, and in Australia, on ABC1 TV, in June and July 2010.

Dickens's story provided inspiration for the web comic The Adventures of Dorrit Little by artist Monica McKelvey Johnson.