A Cure for Dreams is the story of a mother-daughter relationship. It covers four generations of women, and it centers on the relationship between Betty, the narrator, and Lottie, her mother with a great deal of compassion for all people in need. The story begins in the early twentieth century in rural Kentucky.

Betty tells of her mother's family in Kentucky. Lottie is first generation Irish. Her family emigrates from Galway in western Ireland and settles in rural Kentucky. The men in the family are alcoholics and incapable of reliably providing for the family, so Lottie's mother, Bridget, has to take charge, and her methods are often rough. As a young teen, Lottie has recurring fantasies about meeting the man of her dreams. The man Lottie actually meets and marries comes from a Quaker family, and he thinks hard work is the single-most important thing in life. In order to escape the turmoil in her own family, Lottie marries young and moves with Charles to North Carolina.

Early in the marriage, Lottie and Charles realize that they have differing views on the purpose and value of work. Charles believes work is rewarding in its own right, but Lottie is not interested in a life of drudgery with no added benefits. The two soon lose affection for each other but not before a daughter is born. The daughter, Betty, and her mother soon develop a close bond. At times they are as much friends as they are mother and daughter. Lottie becomes well liked and admired by the other women in the area, and she does all she can to help make her friends' lives happier.

As the Great Depression progresses, life becomes increasingly difficult for all the families in the area known as Milk Farm Road. Lottie refuses to let unfortunate economic circumstances dampen her spirits, and she goes out of her way to help others and show them that they can be happy even if they cannot afford all the material things they want or even need. Charles, on the other hand, begins to become more and more irrational. He often speaks of financial devastation. One day he departs the house and does not return. The following day he is found dead in the river, the apparent victim of suicide.

Lottie and Betty manage to get by without Charles, but soon Betty begins to wonder about life away from Milk Farm Road. Lottie tries to discourage Betty from leaving, but eventually Betty's curiosity about a different life triumphs and Betty moves to Richmond, Virginia to study and work. After a few months and an unfortunate encounter with a young man with bad habits, Betty decides to return home. She soon meets another young man, and the two begin dating. Shortly after the United States's entry into World War II, Betty marries.

As they have always done, the women take care of each other, and like her mother, grandmother, and great-grandmother, Betty gives birth to a daughter.