The Buddha of Suburbia is divided into two sections, titled "In the Suburbs" and "In The City." "In the Suburbs" introduces protagonist Karim Amir's mundane life on the southern outskirts of London. Karim lives with his father, mother, and younger brother Allie. Karim’s father, Haroon, is Indian, while his mother is white British. Haroon works as a "guru" to white people in the community, offering them meditation sessions and life-coaching lessons rooted in Eastern traditions. Karim observes as his father is mocked and othered by his clients, and Haroon is often subject to racist jabs and demeaning comments. While attending one of his father's sessions, Karim notices that Haroon seems to have developed a close emotional relationship with Eva. Karim suspects that their friendship is romantic, and his inkling is confirmed when he later catches Haroon in an act of infidelity. This incident changes Karim's relationship with his father, as he now sees him not just as a parent, but as a flawed person with poor judgment.
After witnessing Haroon's affair firsthand, Karim is put in a strange position. He sympathizes with his mother, who has clearly been emotionally neglected throughout her marriage. He debates telling her about Haroon's relationship with Eva, but he ultimately decides it isn't his place. Karim's mother eventually learns of Haroon's infidelity from her sister and brother-in-law, Karim's Auntie Jean and Uncle Ted. Although Karim is overwhelmed by his family situation, he is able to confide in and receive support from his childhood friend named Jamila. Jamila is the daughter of Anwar, Haroon's best friend from India. Karim describes Jamila as radical and ambitious, and she grossly clashes with Anwar's conservatism.
Worried about Jamila's radicalism, Anwar arranges for her to marry a wealthy man living in Bombay. When Karim first meets Jamila's husband-to-be, who is named Changez, he thinks that the marriage is almost certainly destined for disaster. Changez is extremely conservative and religious, and he dreams of building a family with Jamila. However, Karim unexpectedly takes a liking to Changez, and the three become friends. Karim also passes some time with Charlie, who is Eva's son. One afternoon, after spending time with Changez and Jamila, Haroon and Eva tell Karim and Charlie that they will officially move in together. Karim and Charlie follow their respective parents in their relocation. Meanwhile, Karim's mother and brother remain in their former family home and receive support from Auntie Jean and Uncle Ted.
In "In the City," the reader sees the new blended family acclimating to their life in the center of London. Charlie's rock career begins to gain some traction, and Karim starts helping him out as a roadie. Although Karim and Charlie are essentially living as stepbrothers, they are also friends and occasional lovers. Meanwhile, Eva starts socializing with people in the London creative scene, and she builds a client list for her new career as an interior designer. One evening, during one of Eva's social mixers, she introduces Karim to a theater director named Shadwell. This is a major turning point in Karim's life, as he is finally given an opportunity to make strides toward his dream of becoming an actor.
When Karim goes to Shadwell's audition, he discovers that Shadwell is looking for an Indian actor to play the role of Mowgli in The Jungle Book. Although Karim auditions well and is excited when offered the role, he is subject to Shadwell's demeaning and racist directorial behavior. For the role of Mowgli, Shadwell gives Karim an ultimatum that he must use a heavy Indian accent throughout his performance. This prompts Karim to feel confused about his mixed-race identity, and he is prompted to think about navigating his role as a non-white artist within the culturally elite world. Following his performance in The Jungle Book, Karim is offered a role in a developing play by a well-respected theater director by the name of Pyke. Pyke proves to be problematic as well, mainly due to his meddling in Karim's budding relationship with Eleanor, a fellow actor.
Pyke takes Karim on tour to perform his play in New York. While there, Karim reconnects with Charlie, who is now a very famous rockstar living stateside. Karim ends up staying in New York past his own performance dates, choosing to move in with Charlie and handle his affairs as a quasi-personal assistant. The two have many adventures together, but after six months, Karim makes the decision to go back to London. Soon after returning to the UK, Karim learns that he has booked a role as a recurring character on a soap opera. Karim decides to celebrate by taking his family and friends out to dinner. He is joined by Haroon, Eva, Changez, Jamila, Allie, and Allie's girlfriend. At the dinner, Karim considers how many changes have occurred recently—Anwar has died, Jamila and Changez are raising a baby, and Haroon and Eva have decided to get married. Although Karim is unsure about his future, he is grateful to have made progress in his career and to be surrounded by people he loves dearly.