The story takes place in 17th-century Puritan New England, a common setting for Hawthorne's works, and addresses the Calvinist/Puritan belief that all of humanity exists in a state of depravity, but that God has destined some to unconditional election through unmerited grace.

[1] The story begins at dusk in Salem Village, Massachusetts as young Goodman Brown leaves Faith, his wife of three months, for some unknown errand in the forest.

Deeper in the woods, the two encounter Goody Cloyse, an older woman, whom Young Goodman had known as a boy and who had taught him his catechism.

Arriving back at his home in Salem the next morning, Goodman Brown is uncertain whether the previous night's events were real or a dream, but he is deeply shaken, and his belief that he lives in a devout Christian community is unsettled.

The story concludes: "And when he had lived long, and was borne to his grave...they carved no hopeful verse upon his tombstone, for his dying hour was gloom."

The story is set during the Salem witch trials, at which Hawthorne's great-great-grandfather John Hathorne was a judge, guilt over which inspired the author to change his family's name, adding a "w" in his early twenties, shortly after graduating from college.

Hawthorne gives the characters specific names that depict abstract pure and wholesome beliefs, such as "Young Goodman Brown" and "Faith".

Believing himself to be of the elect, Goodman Brown falls into self-doubt after three months of marriage which to him represents sin and depravity as opposed to salvation.

The author introduces the shadowy figure as an "elder person as simply clad as a younger, [with] an indescribable air of one who knew the world".

[10] True to its set up, the dark sable figure presumed to be the devil delivers a conversion speech for the Goodman Brown by lecturing how Puritans "shrank from your own sin, contrasting it with their lives of righteousness and prayerful aspirations heavenward. ...

This night it shall be granted you to know their secret deeds: how hoary-bearded elders of the church have whispered wanton words to the young maids of their households."

Overall, the shadowy figure and the aura of the final demon meeting can imply an interpretation that perfection is simply a myth, and those in pursuit of it do so out of naivety of reality.

[13] Contemporary critic Edgar Allan Poe disagreed, referring to Hawthorne's short stories as "the products of a truly imaginative intellect".

This is the only work of Hawthorne's included in the Library of America's 2009 anthology American Fantastic Tales: Terror and the Uncanny from Poe to the Pulps.