Jack Aubrey and his particular friend Stephen Maturin are in the naval service of England during the early 19th century. Aubrey is a master and commander of some repute and hopes for rapid promotion to post captain. Maturin is a surgeon of wide renown; he is also a secret agent working for the naval intelligence service. When war with France is declared, Aubrey and Maturin retire to sea and fight against the common enemy.

When the novel opens, England and France declare a cessation of hostilities. As military men, Aubrey and Maturin thus have much free time and Aubrey rents a small estate for a period of one year. Aubrey and most of his men, along with Maturin, retire to the estate and fox hunt and pass the time. They discover that their next door neighbors consist of a family of eligible girls and they begin to make social calls upon them. Relatively quickly Aubrey becomes enamored of Sophia while Maturin becomes enamored of Diana. As time passes, Maturin's composure is quite affected by Diana, though she rebuffs his advances. The idyllic scene comes crashing down when Aubrey learns that various business arrangements have stripped him of his wealth and left him heavily in debt, facing incarceration in the debtor's prison. Aubrey and Maturin, each for their separate reasons, desire to leave the country and so they travel to Toulon.

They spend some time in Toulon with an old friend and then learn war is about to be declared. Rather than face arrest, they sneak through the countryside with Aubrey—obviously an Englishman—disguised as a dancing bear. After making an arduous passage, they reach Gibraltar and take voyage home on a merchant ship. The ship is engaged by a French privateer and, after a very hot engagement, is captured. Before the prize can be taken to a French port, however, it is recaptured by an English squadron. Aubrey is given command of a bizarre experimental craft and stationed in the channel. As Sophia is beyond his reach, he instead ardently courts Diana which is devastating to Maturin. During this time Aubrey has some military successes. Maturin and Aubrey then have a serious falling out and tentatively declare a duel of honor which is postponed due to sailing schedules.

After several weeks Aubrey takes his strange ship into action against a French vessel sheltering in a safe harbor. His ships unfortunately grounds on a spit; rather than accept defeat, however, Aubrey audaciously leads his men in boats and they capture the French vessel, then winch their own ship off the banks. They start out to sea, taking a prize on the way, and then return to England where Aubrey recovers from serious wounds and rehabilitates his friendship with Maturin. Aubrey and Maturin are then posted to a crack ship, H.M.S. Lively, and spend time on station duty. Diana, contrary to everyone's expectations, runs off with a rich merchant man. Maturin intervenes decisively on Aubrey's behalf with Sophia and helps them to rehabilitate their courtship and reach an unofficial understanding. Aubrey is then ordered to intercept a Spanish treasure fleet. With a squadron of four frigates, a very hot but brief action is enjoined and the Spanish ships are taken. Aubrey, putatively wealthy beyond believe, believes he will now marry Sophia in proper style and cheerily drinks to her health.