That Hideous Strength differs from Out of the Silent Planet and Perelandra in that Dr. Elwin Ransom is not the novel's protagonist. This installment instead follows Mark and Jane, a young married couple, as their drab and meaningless lives take rather dramatic turns. That Hideous Strength differs from the previous two novels in many other respects as well, notably that the entire novel takes place on Earth.
The novel opens with Jane Studdock, wife of Mark, who has just had a strange dream about an old imprisoned man being decapitated, as well as the digging up of a long-sleeping but not-quite-dead man. She notices the picture of the prisoner in the paper, and, rattled, heads out to investigate.
Meanwhile, Mark is on the way to his new fellowship at Bracton College (at the University of Edgestow). Being a sociologist (and just plain insecure), Mark spends much of his time and energy observing the existence of social circles and trying to figure out how to make his way into an "inner ring." He initially talks casually with Curry, the sub-warden of Bracton, feeling the thrill of inclusion, before meeting Lord Feverstone (who is, in fact, Dick Devine, who had a significant role in Out of the Silent Planet) and sympathizing with him, suddenly finding Curry petty and tacky. Feverstone offers him a position with N.I.C.E., a new, ambiguously purposed scientific institution that is planning to set up on a piece of land in Edgestow. It comes to light that they are purchasing a small piece of land from Bradgon Wood, a property long held by the College and believed to be the burial ground of the sorcerer Merlin from Arthurian myth.
Jane goes to see Mr. and Mrs. Dimble, the former of whom was her tutor, who are being evicted from their house on account of the N.I.C.E.'s acquisition of land. After some pleasantries and conversation, Mrs. Dimble advises Jane to go see her friend Miss Ironwood, who lives in a manor at St. Anne's. Thinking Miss Ironwood is some sort of therapist, Jane noncommittally assents, but later has a psychological crisis and acquiesces to the request. When Mark comes home, there is a pseudo-fight, and the next morning brings awkward tension between them.
Mark travels with Lord Feverstone to the headquarters of the N.I.C.E. at Belbury. There he meets with the Deputy Director, Mr. Wither, who is remarkably vague and evasive when discussing the actual terms of Mark's job. Mark then goes downstairs and meets various important members of the N.I.C.E., including Bill Hingest, an older man who's leaving the N.I.C.E. and advises Mark to do the same, and "Fairy" Hardcastle, a revoltingly attractive middle-aged woman with a harsh presence.
Jane goes to see Miss Ironwood, who tells her that she may be able to see visions of actual events, as did her ancestor. Jane, angry with the Dimbles for deceiving her, leaves. Mark finds out specificities about his job: he will be writing pro-N.I.C.E. propaganda for the newspapers. After being mostly convinced of its value, he begins his work. Jane finally meets Dr. Elwin Ransom (known as the Director) at the manor at St. Anne's, who has become something of a founder of an order in the prevention of chaos, as well as a ruler of the nation of Logres and the heir of King Arthur. The heel wound he suffered in the course of Perelandra still ails him. He tells Jane of the cosmic war Earth is involved in, as well as her importance to the cause.
Mark's propaganda job comes into focus with the N.I.C.E.'s invasion and takeover of the town of Edgestow. The ensuing riots are Mark's main priority. The N.I.C.E.'s private "police" force struggles against the riots and arrests Jane, led by Fairy Hardcastle, who interrogates her and tortures her, burning her with cigars.
Mark sees Filostrato (the large Italian scientist with whose company he replaced that of Feverstone) again, who introduces him to the Head of the N.I.C.E. - an actual disembodied head, belonging to Alcasan, the recently executed scientist Jane dreamed of. Mark starts to become disillusioned with the N.I.C.E., which seems far more sinister than it did when he accepted the job.
Ransom deduces that the N.I.C.E. is attempting to dig up Merlin (a subject on which he is familiar, being King Arthur's heir). Mark is charged with the murder of Bill Hingest, who was killed on the drive back to his house on the night he tried to leave the N.I.C.E. for good. Mark finally turns his back on the N.I.C.E. and tries to find Jane, but he only finds her missing and the town under control of the N.I.C.E.
From this point on, the novel's pace and tension increase dramatically. Mark learns about St. Anne's from Dimble, and is subsequently arrested by the N.I.C.E. for Hingest's murder. Instead of being executed, however, he is invited to undergo "training" in order to be initiated into the Inner Ring of the N.I.C.E. In this training, Mark is brainwashed concerning the supremacy of scientific materialism and the importance of control over the human race by scientific means. By this point, however, he is convinced that the N.I.C.E. is evil, and he only pretends to go along with these teachings.
Somewhere in all of this, the N.I.C.E. dig up Merlin, who reawakens and escapes their clutches by switching clothes with a tramp, whom the N.I.C.E. apprehend, leading to a hilarious scene in which their top linguists reverently attempt to understand the silent, occasionally babbling impersonator while the real Merlin visits Ransom and ascertains his true identity as the heir of Arthur. Ransom tells him that the Oyéresu (the angelic beings in charge of the planets of the Solar System) will possess Merlin and fight the demonic force of the N.I.C.E. Jane, meanwhile, has surreal supernatural experiences with an Oyarsa and with God, later learning about the Christian faith from the inhabitants of St. Anne's and choosing to accept it.
The possessed Merlin undertakes a mission of justice in which he insinuates himself into the N.I.C.E as an ancient linguist before unleashing the "curse of Babel" on the entire organization at a banquet, hilariously confusing their language and siccing their abused animals on them, resulting in something of a massacre.
The novel becomes mind-bogglingly surreal and symbolic as fire and destruction come down on the N.I.C.E. and the whole city of Edgestow, which is utterly destroyed. All the "good" characters end up at the manor at St. Anne's, where they have closure. Ransom leaves to return to Perelandra, as he once dreamed, and the novel ends with Mark and Jane happily reunited.
