"Althea and Oliver" is the story of two friends, Althea Carter and Oliver McKinley, who have been inseparable since they were 6 years old. Althea's mother left the family when Althea was six and she now lives with her father, Garth Carter, who is an instructor at a college in their hometown, Wilmington, North Carolina. Oliver lives with his widowed mother, Nicky McKinley, who works as a masseuse at a local luxury spa. Althea and Oliver are now juniors in high school and spend all their time together even though they are not romantically involved. Their time together is complicated by the fact that Oliver has a sleeping sickness called Kleine-Levin Syndrome which causes him to grow exhausted and fall asleep for weeks at a time.

Althea grows bored when Oliver is in one of his sleeping episodes and finds a few new friends who like drinking, smoking, and hard music, but what she would really like is to be Oliver's girlfriend. One day Althea rouses Oliver slightly during one of his sleeping spells and has sex with him even though he is not really awake. Althea begins to spend more time with her other friends as Oliver sleeps and learns that they have friends in New York who provide food for homeless people. When Oliver eventually awakens, Althea finds the courage to tell him that they had sex without his full knowledge and Oliver is immediately angry that she took advantage of him. Oliver and Althea fight and Oliver leaves for New York with his mother who has entered him into a study of Kleine-Levin Syndrome at a hospital there. When Althea finds out that Oliver has left town, she lies to her father about going to visit her mother in New Mexico for the holidays and drives to New York instead.

By the time Althea reaches the hospital in New York, Oliver is in another sleeping episode. Althea finds the New York friends who prepare food for the homeless and stays with them for several weeks while Oliver is in the hospital. When Oliver awakens, one of his friends in the hospital study tells him that Althea had come to visit him so Oliver calls Althea's friends to see where she is staying in New York. Oliver surprises Althea and they spend New Year's together by drinking and having sex. They decide that they don't have a romantic relationship but will always be friends. Althea calls her father to tell him that she is actually in New York, not New Mexico, and that she is not returning home to finish high school. Oliver decides to take the medication recommended by the hospital study and returns home to Wilmington to finish his senior year.