Dance Hall of the Dead is a detective story that takes place on Native American land. In order to find the murderer of a young Zuni boy, Navajo detective Joe Leaphorn will need to call upon his knowledge of Navajo and Zuni tradition and upon his incredible skills as a tracker. The investigation takes Lieutenant Leaphorn from the Navajo hogan of the dead boy's missing friend, George Bowlegs, to a nearby hippie commune, to an archaeological dig site and finally to a sacred lake that in Zuni tradition is called the Dance Hall of the Dead. Leaphorn's quest is to save the Bowlegs boy, who the prejudiced Zuni assume is the killer. Leaphorn believes that young Bowlegs is innocent and is also in danger of being murdered, just like his Zuni friend Ernesto Cata. Due to local prejudices against the Navajos, Leaphorn quickly realizes that he is young George's only defender. George has no one else to care for him when Ernesto's murderer kills George's alcoholic father.

Leaphorn's quest to save and exonerate the boy will challenge Leaphorn's logical mind. Leaphorn credits his unusually savvy detective skills to the Navajo wisdom he was fortunate to learn from his grandfather. As the story progresses, Leaphorn teaches some valuable lessons about a man's character. He teaches the Navajo way through his example. This is the way of The People, or the Dinee as they are called in Navajo. The Navajo judge worldly success by a man's character as opposed to judging success financially, which Leaphorn believes is the white man's way. By the time the killer's identity is discovered, Leaphorn has shown that the way in which people react to evil determines their character. Ultimately, the character of the individuals who are caught up in the murder investigation is more important to Leaphorn than solving the case.