The book tells the story of Julian West, a young American who, towards the end of the 19th century, falls into a deep, hypnosis-induced sleep and wakes up more than a century later. He finds himself in the same location (Boston, Massachusetts) but in a totally changed world: It is the year 2000 and, while he was sleeping, the U.S.A. has been transformed into a socialist utopia. This book outlines Bellamy's complex thoughts about improving the future.

The young man readily finds a guide, Doctor Leete, who shows him around and explains all the advances of this new age, including drastically reduced working hours for people performing menial jobs and almost instantaneous delivery of goods from stores to homes. Everyone retires with full benefits at age 45. The productive capacity of America is commonly owned, and the goods of society are equally distributed to its citizens. A considerable portion of the book is dialogue between Leete and West wherein West expresses his confusion about an issue and Leete explains it.

Although Bellamy's novel did not discuss technology in detail, commentators frequently compare Looking Backward with actual social and technological developments. For example, Julian West is taken to a store which (with its descriptions of cutting out the middleman to cut down on waste in a similar way to the consumers' cooperatives of his own day based on the Rochdale Principles of 1844) somewhat resembles a modern warehouse club. He additionally introduces the concept of credit cards in chapters 9, 10, 11, 13, 25, and 26 (though their description more closely resembles modern day debit cards). Bellamy also predicts classical music and sermons being available in the home through cable "telephone."