Colonel Herncastle, an unpleasant former soldier, brings the Moonstone back with him from India where he acquired it by theft and murder during the Siege of Seringapatam.

Angry at his family, who shun him, he leaves it in his will as a birthday gift to his niece Rachel, thus exposing her to attack by the stone's hereditary guardians, who will stop at nothing to retrieve it.

Suspicion falls on three Indian jugglers who have been near the house; on Rosanna Spearman, a maidservant who begins to act oddly and who then drowns herself in a local quicksand; and on Rachel herself, who also behaves suspiciously and is suddenly furious with Franklin Blake, with whom she has previously appeared to be enamoured, when he directs attempts to find it.

Despite the efforts of Sergeant Cuff, a renowned Scotland Yard detective, the house party ends with the mystery unsolved, and the protagonists disperse.

In despair at her inability to make him acknowledge her despite all she had done for him, she killed herself, leaving behind the smeared gown and a letter he did not receive at the time because of his hasty departure abroad.

They join to continue the investigations and learn that Franklin was secretly given laudanum during the night of the party (by Mr. Candy, who wanted to exact vengeance on Franklin for criticising medicine); it appears that this, in addition to his anxiety about Rachel and the diamond and other nervous irritations, caused him to take the diamond in a narcotic trance, to move it to a safe place.

Under the dead man's disguise is none other than Godfrey Ablewhite, who is found to have embezzled the contents of a trust fund in his care and to have been facing exposure soon after the birthday party.

The mystery is solved, Rachel and Franklin marry, and in an epilogue from Mr. Murthwaite, a noted adventurer, the reader learns of the restoration of the Moonstone to the place where it should be, in the forehead of the statue of the god in India.

[3] The final novel was serialised in the periodical All the Year Round from 4 January to 8 August 1868, as well as simultaneously in the American publication Harper's Magazine.

[4] To dull the pain, Collins took large amounts of laudanum, resulting in portions of the novel to be written in a drug-induced haze.

Lynn Pykett argues that "the main narrative of The Moonstone concerns the disruption of the tranquility and order of genteel English life by a colonial legacy.

"[5] The events of the plot are set into motion by Colonel John Herncastle's unlawful theft of the Moonstone in India, and, in leaving the diamond to Rachel Verinder in his will, he is perpetuating his crime.

The plot also shows some parallels with The Hermitage (1839), an earlier murder mystery story by the English novelist Sarah Burney: for example, the return of a childhood companion, the sexual symbolism of defloration implied in the crime, and the almost catatonic reactions of the heroine to it.

[13][14] The Moonstone represents Collins's only complete reprisal of the popular "multi-narration" method that he had previously used to great effect in The Woman in White.

The sections by Gabriel Betteredge (steward to the Verinder household) and Miss Clack (a poor relative and religious crank) offer both humour and pathos through their contrast with the testimony of other narrators, at the same time constructing and advancing the novel's plot.

A fictionalised account of Collins's life while writing The Moonstone forms much of the plot of Dan Simmons's novel Drood (2009).

[15] The Moonstone had a great influence on other authors of the time, and books inspired by Collins' work quickly began appearing.

Anthony Trollope's The Eustace Diamonds (1873) was written to tap into the thread of popular interest that Collins' novel caused, with the central plot revolving around the investigation of stolen jewels.

Adapted to the screen by Adele S. Buffington, it was directed by Reginald Barker, and starred David Manners, Charles Irwin and Phyllis Barry.

[19] On 15 April 1947, an adaptation of "The Moonstone" was episode #47 of the NBC radio series Favorite Story hosted by Ronald Colman.