The plot is set in early-1970s England. Serena Frome ("rhymes with plume"), the daughter of an Anglican bishop, shows a talent for mathematics and is admitted to the University of Cambridge. But she struggles academically, and graduates with a third. While at Cambridge she becomes romantically involved with Tony Canning, a professor, who before abruptly ending the affair secures a position for Serena with MI5. The job is low-level, but a more exciting opportunity appears when Serena is offered a chance to take part in a new covert program codenamed "Sweet Tooth". To counter Communist propaganda during the Cold War, the agency wants to offer financial assistance to young writers, academics and journalists with an anti-Communist bent. Serena, who is an avid and quick reader of fiction, is given the task of vetting burgeoning writer Thomas Haley.
Serena is immediately taken by Haley's published short fiction. She travels to the University of Sussex, where he works, to offer him a stipend from the fictional Freedom International Foundation. Soon the two begin a romantic affair, but things gradually start to unravel. Serena discovers that Professor Canning (who, it turns out, broke off their affair only because he knew he was dying from cancer) was in fact a Soviet spy, and she was recruited because the agency wanted to keep tabs on Canning. Then, when Haley's first novel comes out, it is a great critical success, but its dystopian, anti-capitalist theme is not well received by the agency. Finally, his affair with Serena is exposed by the press, and the whole Sweet Tooth program is threatened.
Serena fears that she has lost Haley's love forever, now he knows she has deceived him. Haley, however, had known about the program for months, and instead of ending the affair, had decided to turn the story into a novel. The reader now discovers that the author of Sweet Tooth is in fact Haley, despite its being written from Serena's first-person perspective. As the novel ends, Haley asks Serena in a letter to marry him.
