Set in Japan, the story follows a poor young artist who lives in a small house with his housekeeper. One day, as he waits hungrily for the housekeeper to return from market with food, she arrives with a basket and admits she has spent their pennies not on food but on a cat, reasoning that they have been lonely. The artist erupts in frustration, calling cats goblins and devils that suck blood and bring misfortune. The housekeeper defends her purchase by recounting a folk tale about a boy whose drawings of cats came to life and killed a giant rat. The artist relents, reasoning that even a devil in the household might keep other devils away.
When the basket is opened, a small, dainty white cat with yellow and black spots and a short, rabbit-like tail steps out and bows her head as though saluting the artist. He recognizes her as a lucky three-colored cat and is charmed by her beauty and contented purring, admitting they have indeed been lonely. The housekeeper suggests naming the cat Good Fortune, but the name only reminds the artist of his poverty.
In the days that follow, Good Fortune proves herself unusually well-mannered. She eats sparingly, as though to minimize her burden on the household. While the artist paints pictures no one buys, Good Fortune sits quietly and spends hours with her head lowered before the household image of the Buddha. Then one day the artist watches Good Fortune catch a sparrow, hold it between her paws, and deliberately release it unharmed. The act of mercy moves him to tears, and he silently acknowledges his shame at having called her a goblin, thinking she is more virtuous than a priest.
At that moment, the housekeeper announces that the head priest of the village temple has come to visit. The priest explains that the temple needs a painting of the death of the Buddha. Slips of paper bearing artists' names were placed before the temple's central image, and by morning all had blown away except the artist's, revealing the Buddha's will. The priest presents a heavy purse as first payment, promising that success will make the artist's fortune. After the priest leaves, the artist wonders whether the Buddha chose him because of Good Fortune's prayers, since he himself has been too sad to pray.
The artist spends three days meditating on the life of the Buddha before touching a brush. On the first day, he imagines himself as Prince Siddhartha, the young Indian prince who would become the Buddha, living in luxury and winning the princess Yosadhara. On the second day, he reflects on Siddhartha's renunciation after encountering suffering for the first time; that night Siddhartha gazes at his sleeping wife and child, then rides away on his white horse Kanthaka, abandoning his princely life. On the third day, the artist imagines Siddhartha's meditation under a bo tree (a sacred fig tree), the devils' temptations, and the great wisdom that makes him the Enlightened One. In his vision, the artist notices the absence of the cat among the animals gathered to bid the dying Buddha farewell and recalls that the cat alone refused homage and was denied entry to Paradise. From these three days he distills the qualities the Buddha's face must convey: gentle upbringing, great suffering, and peace given to others. Exhausted, he sleeps for 24 hours, then paints the reclining figure of the Buddha in less than three hours.
Over the following days, the artist paints the gods, disciples, and animals who came to bid the Buddha farewell, meditating on each creature's virtues. Good Fortune, now well-fed and wearing a flowered bib, repeatedly sneaks away from the housekeeper to watch. He paints the snail that shielded the Buddha's head from the sun, the elephant who sacrificed himself for starving fugitives, the horse who with his dying breath asked the king to pardon all prisoners, and many more.
When the artist turns to dogs, the housekeeper tells the story of Shippeitaro, a loyal dog who was placed in a sacrificial basket by a soldier and leaped out at midnight to rout goblins terrorizing a village. When the artist asks what form the goblins took, the housekeeper whispers that they were cats. Good Fortune overhears and leaves the room with a sad look. As the artist paints deer, a monkey, and more creatures, Good Fortune grows increasingly distressed, pulling at the artist's sleeve and seeming to ask if there is room for her among the blessed animals.
The artist then confronts the tiger. After long contemplation, he realizes that the tiger's devotion to its mate and cubs may be "the narrow pathway by which the tiger reaches the Buddha" (74). He recalls that the Buddha himself once took tiger form in a past life. Good Fortune trembles at the completed tiger and seems to plead: Surely a cat, little and often gentle, might also be included. The artist gently explains that the cat alone refused the Buddha's teachings and was not blessed by him. Good Fortune presses her head against his chest and cries like a child.
After ordering the housekeeper to keep Good Fortune away, the artist sits alone before the nearly completed scroll, hearing the cat's faint mewing from the kitchen. He reflects that Good Fortune is gentle and sweet but forever shut out of Nirvana, the state of blessed liberation, while every other animal may receive the Buddha's blessing. Declaring he cannot be so hard-hearted, he paints a cat as the last of all the animals. He calls Good Fortune in. She runs to the picture, looks and looks as though she can never look enough, and gazes at the artist with all her gratitude. Then she falls dead, too happy to live another minute. The housekeeper buries her in the garden with a flower and a shell at the grave and a little bell in the peach tree nearby.
The next morning, the priest comes to view the finished painting. After admiring its radiance, his face hardens when he notices the cat. He sternly declares the painting will be burned at the temple, since the cat rebelled against the Buddha and each being must suffer the consequences of its own acts. The housekeeper weeps all day, blaming herself for bringing the cat home. The artist sits through day and night in darkness, yet does not regret his choice. Having lived so many days immersed in thoughts of love and sacrifice, suffering for Good Fortune's moment of happiness does not seem too hard.
An hour after dawn, he hears people running toward his house. The temple priests surround him, crying that a miracle has occurred. The artist follows them to the temple, where his painting hangs with incense and candles burning before it. Where the cat had been painted, there is now only blank white silk, as though no ink had ever touched it. The great Buddha, whom the artist had painted reclining with hands folded upon his breast, has stretched out an arm in blessing, and beneath the holy hand kneels the figure of a tiny cat with a pretty white head bowed in happy adoration.