Beautiful Losers by Leonard Cohen is a stream-of-consciousness story of an unnamed folklorist living in a psycho-sexual hell. Having lost his wife and male lover, he turns to the history of an Iroquois saint for his salvation. The novel is a depiction of spiritual yearning in the orgiastic humanistic days of the mid-sixties.

In the first book, The History of Them All, the nameless narrator researches Catherine Tekakwitha, a nearly-sainted Iroquois from the seventeen century. He has lost the two people he loves: his wife Edith and his childhood friend F. He had a sexual affair with both, but only after Edith's suicide did he learn that she and F. slept together. Now, the narrator masturbates frequently, suffers crippling constipation and no longer bathes, refusing to leave his apartment in Montreal.

After Edith's death, F. - who is a libertine, Member of Parliament, and general bully - proceeds to put the narrator through a series of tests, mostly sexual, forcing him to admit his desire for power and spiritual contentment. F. fakes a car-crash to scare him and drags him into the Free Quebec movement, for which F. has become a strong voice. F. is entering the late stages of syphilis, however, and is going mad. Before she died, Edith roped him into experimenting with holy items, and the two of them grow obsessed with total orgasms.

The narrator meanwhile, finally leaves his disgusting apartment and goes to F.'s tree-house, one of many assets bequeathed after his friend's death. There, he grows desperate and cold. He learns about Catherine Tekakwitha's chastity and her renunciation of her Iroquois beliefs. The narrator longs to be with her. He recalls the day F. told him about his plan to blow up a statue of Queen Victoria during Elizabeth II's visit to Canada.

In Book 2, A Long Letter from F., F. - now imprisoned in a mental asylum after the bombing - writes the narrator to explain his methods. He tells him that both he and Edith decided that the narrator was the only one who could attain spiritual grace. He has been training him with his sexual-emotional tests. F. describes a night he spent with Edith where they nearly achieved their full-body orgasms and were baptized with a special soap. F. proceeds to tell the narrator about the death of Catherine Tekakwitha and her subsequent miracles. As the letter ends, F. says that the Free Quebec movement is breaking him out of the asylum.

The novel ends with Beautiful Losers: An Epilogue in the Third Person. In this epilogue, F. is a homeless old man who molests little boys and performs oral sex on women in cars. In the final passages, he is accosted by arcade patrons that recognize him. Before they can seize him, he transforms into a projection screen. The novel ends with a plea to pray to Catherine Tekakwitha and a farewell from the author.