It tells the story of Larry Darrell, an American pilot traumatized by his experiences in World War I, who sets off in search of some transcendent meaning in his life.

The novel's title comes from a translation of a verse in the Katha Upanishad, paraphrased in the book's epigraph as: "The sharp edge of a razor is difficult to pass over; thus the wise say the path to Salvation is hard.

Wounded and traumatised by the death of a comrade in the War, Larry Darrell returns to Chicago and his fiancée Isabel Bradley, only to announce that he does not plan to seek paid employment and instead will "loaf" on his small inheritance.

After two years of this "loafing", Isabel visits and Larry asks her to join his life of wandering and searching, living in Paris and traveling with little money.

Meanwhile, Larry begins a sojourn through Europe, taking a job at a coal mine in Lens, France, where he befriends a former Polish army officer named Kosti.

After spending months with the Benedictines and being unable to reconcile their conception of God with his own, Larry takes a job on an ocean liner and finds himself in Bombay.

Maugham then initiates the reader to Advaita philosophy and reveals how, through deep meditation and contact with Bhagawan Ramana Maharshi, disguised as Sri Ganesha in the novel, Larry goes on to realise God through the experience of samadhi—thus becoming a saint—and in the process gains liberation from the cycle of human suffering, birth, and death that the rest of the earthly mortals are subject to.

The 1929 stock market crash has ruined Gray, and he and Isabel are invited to live in her uncle Elliott Templeton's grand Parisian house.

Sophie has also drifted to the French capital, where her friends find her reduced to alcohol, opium, and promiscuity – empty and dangerous liaisons that seem to help her to bury her pain.

He is drawn back into the tale when police interrogate him after Sophie has been found murdered with an inscribed book from him in her room, along with volumes by Baudelaire and Rimbaud.

[3][4] Maugham's suggestion that he "invented nothing" was a source of annoyance for Christopher Isherwood, who helped him translate the verse (1.3.14) from the Katha Upanishad for the novel's epigraph – उत्तिष्ठ जाग्रत प्राप्य वरान्निबोधत| क्षुरस्य धारा निशिता दुरत्यया दुर्गं पथस्तत्कवयो वदन्ति|| (uttiṣṭha jāgrata prāpya varān nibodhata| kṣurasya dhārā niśitā duratyayā durga pathas tat kavayo vadanti|| ) – which means "Rise, wake up, seek the wise and realize.