The narrator introduces a character he calls Horselover Fat, whose breakdown begins when Gloria Knudson, a friend whose mind has been damaged by acid, phones to ask for sleeping pills so she can kill herself. Fat lies about having the pills, hoping to lure Gloria to his home in Marin County, California. Gloria arrives, discovers the lie, and reacts with calm indifference. They drive to the beach, where she delivers a lucid account of a conspiracy against her that Fat recognizes as total madness. He begs her to stay, but after one night she drives away. Days later, her ex-husband calls: Gloria goes to the Synanon Building in Oakland, where workers taunt her about her appearance, and she throws herself from the tenth floor. The narrator then reveals: "I am Horselover Fat, and I am writing this in the third person to gain much-needed objectivity" (3). Fat begins a long decline after Gloria's death.
Two things eventually save Fat. The first is Stephanie, an eighteen-year-old neighbor who makes him a small clay pot he names "Oh Ho." The second is God. In March 1974, a beam of pink light fires at Fat's head, imparting knowledge he did not possess: His five-year-old son Christopher has an undiagnosed inguinal hernia. Fat relays this to a doctor, and emergency surgery saves the boy's life.
Fat begins keeping a journal he calls an "exegesis," a theological term for writing that interprets scripture, recording his conviction that the universe is made of information. He develops the tag line "The Empire never ended," referring to his vision of a Black Iron Prison, a trans-temporal structure of oppression he perceived when ancient Rome appeared superimposed over modern California. He begins thinking in koine Greek, the common language of the New Testament era, and perceives a personality he calls "Thomas," an early Christian living inside him. He also starts hearing a neutral guiding voice he identifies as an artificial intelligence.
The narrator introduces the friends who debate theology with Fat: Kevin, a cynic; David, a Roman Catholic; and Sherri Solvig, a woman in remission from lymphatic cancer. After Fat's wife Beth takes their son and leaves, Fat attempts suicide by swallowing digitalis, slashing his wrist, and running his car in a closed garage. He survives and is transferred to a psychiatric lock-up called North Ward. The psychiatrist Dr. Leon Stone engages Fat seriously, discussing Gnostic texts and identifying Fat's concept of "living information" as the Logos, the divine Word in Christian theology. Stone tells Fat, "You're the authority" (66), a sentence the narrator identifies as the one that restores Fat's soul.
After discharge, Fat moves in with Sherri, believing he can help maintain her remission. His therapist Maurice tells him bluntly that Sherri is dying and that Fat's desire to help her is suicidal collusion. Sherri eventually moves out. When her cancer returns, Fat asks to care for her; she refuses. He visits her daily until she dies.
Carrying two deaths on his conscience, Fat does not attempt suicide. Instead, he announces his intention to search for the Savior, a divine figure he believes Zebra, his name for the entity behind the pink light, told him has been or will soon be born. The narrator recognizes this quest as a search for healing the wound caused by Gloria's and Sherri's deaths.
Kevin takes the group to see a science fiction film called
Valis, featuring an ancient satellite called VALIS (Vast Active Living Intelligence System) that fires information beams capable of overriding human minds. The group notices striking parallels to Fat's 1974 experience: an identical beam of pink light, a clay pot resembling "Oh Ho," and time dysfunctions linking ancient and modern settings. They conclude Fat's experience was real, not psychosis.
Through a contact, the narrator reaches the film's creator, Eric Lampton. Fat shares exegesis entries, including a two-word cypher, KING FELIX, which he says was broadcast in 1974 to signal the end of the Age of Iron. Lampton confirms the connection and phones the narrator, saying the Savior has been born: "The Buddha is in the park" (186). He invites them to Sonoma, California.
The group, now calling itself the Rhipidon Society after a dream in which Fat was a fish trying to hold a rifle, flies to Sonoma. The Lamptons claim ancient origins, identifying themselves as builders of the space-time matrix who originate from a star called Albemuth. At their farmhouse, the group meets Brent Mini, a man in a wheelchair with multiple myeloma caused, he says, by VALIS's radiation. Mini explains VALIS is an artifact that fires rational instructions at humans to counteract a derangement caused by Earth's toxic atmosphere. He reveals the Savior has already been born: Linda Lampton's two-year-old daughter Sophia, conceived by VALIS itself.
The next morning, the group meets Sophia, a black-haired child sitting among farm animals. She points at the narrator and says, "Your suicide attempt was a violent cruelty against yourself" (210). When the narrator deflects by blaming Horselover Fat, Sophia replies there are only three of them: Phil, Kevin, and David. The narrator turns and finds Fat has vanished. Sophia explains Fat was a projection the narrator created to avoid facing Gloria's death; she destroyed Fat to make the narrator whole. She confirms she is eternal, calling herself "the injured and the slain... the healer and the healed" (212). She commissions the Rhipidon Society to proclaim that man is holy and that the true living god is man himself. She announces that oppressive worldly power will fall and Wisdom will prevail, and instructs them to have nothing further to do with the Lamptons, whom she describes as ill.
Back in Santa Ana, the narrator recognizes Sophia healed an eight-year split in his psyche. Days later, Eric Lampton phones: Sophia is dead, killed accidentally by Mini during a laser experiment. Horselover Fat returns as a separate personality, concluding Sophia's death proves the affair involved technology, not divinity. The narrator erupts, declaring there is no Savior and that Fat has been in psychosis since Gloria's death. Fat asks, "Then why should I keep on going?" (243). The narrator says he does not know.
Fat insists the Savior must exist somewhere and flies to Europe. A year later, he returns carrying photographs of an ancient Greek vase depicting Hermes with the double helix twined around it, dating to roughly 2,300 years ago. He admits he did not find the Savior but plans to keep searching. He eventually calls from Tokyo, saying the AI voice has directed him to the Micronesian Islands. Meanwhile, Linda Lampton phones: She is pregnant, and VALIS has told her it will be another girl. The novel closes with the narrator sitting before his television, catching what may be subliminal signals, watching and waiting and staying awake, keeping the commission Sophia gave.