Rule of Bone is a coming of age story, set partly in the teenage wasteland of upper New York, and partly in the sunny and seedy paradise of Jamaica. Chappie is a thirteen-year-old misfit with a burgeoning drug habit, living with his mother and his abusive stepfather Ken in Au Sable, a small town in upstate New York. Chappie's flight from his abusive home is a tale of delinquency, crime, friendship, and heartbreak.

To support his growing dependence on marijuana, thirteen-year-old Chappie begins pawning items from the home of his mother and stepfather. After pawning off a collection of rare coins given to his mother by his grandmother, Chappie is kicked out of the house. He finds a chaotic home in the apartment of his friend Russ, a sixteen year old run away who works at a video store in the same building. Russ sublets the apartment to a biker gang called the Adirondack Iron. The bikers begin dealing in stolen electronics, but keep the boys from taking a cut. Russ starts stealing electronics from the bikers in small amounts, but is found out by the biker's leader Bruce. Chappie and Russ escape from the bikers, in the process starting a fire which burns down the building and kills Bruce, who ran back into the fire to try to save Chappie.

Chappie and Russ are now presumed dead by their parents and the rest of Au Sable. Chappie gets a tattoo depicted two crossed bones, and takes on the new name Bone. The boys break into an empty summer house in nearby Keene and live for several months, before disorder, boredom, and lack of entertainment force them to go their separate ways. Russ returns to Au Sable, but Chappie journeys to Plattsburgh, rescues a young girl from the clutches of a seedy porn producer, and together they begin living in an abandoned school bus with an older Jamaican Rastafarian named I-man. I-man teaches Chappie and Rose, the young girl, about vegetarianism, and about thankfulness. Chappie puts Rose on a bus to Milwaukee to be reunited with her mother Nancy, says goodbye to I-man, and returns to Au Sable to attempt to reconcile with his mother and Ken.

Chappie's return to Au Sable is a debacle. Ken and his mother have separated, and his stepfather is drinking heavily and has trashed the house. Chappie's mother blames their separation on Chappie's delinquency. Chappie is unable to tell his mother or his grandmother that Ken sexually abused him. He demands that his mother choose between himself and Ken. His mother tells Chappie that she will reconcile with Ken, and Chappie leaves Au Sable.

Chappie returns to Plattsburgh and to I-man's school bus. The two decide to travel together to I-man's native Jamaica. Once there, Chappie is reunited with his biological father, a drug addict who practices medicine for the government. I-man initiates Chappie into Rastafarian manhood. After a botched drug deal, I-man is killed and Chappie begins panhandling in Montego Bay. To compound his grief, he learns that Sister Rose died of pneumonia shortly after returning to Milwaukee.

Chappie settles peaceably with his delinquent father and I-man's killer before sailing away to begin his new life accompanied by the everlasting memory of his friends.