The narrator is a chronic insomniac unsatisfied with his career as an expert in vehicle recalls. He participates in support groups for conditions including testicular cancer and alcoholism as a stand-in for therapy. At times, he enjoys being there. Marla Singer, another fake, starts going to the same gatherings. The Narrator interprets her presence as a constant reminder of his deceit, which interferes with the therapeutic outcome he seeks. He confronts Marla, who reluctantly agrees to his suggestion that they divide up group attendance. The narrator is a typical middle-class man who works for an automaker and examines car crashes to decide whether a car model needs to be recalled.
While on their way home after a business trip, Tyler Durden, a soap salesman, mentions that If we add gasoline and frozen oranges, we can make napalm, and one can make all kinds of explosives with simple household items. After an explosion destroys the Narrator’s flat and all of his possessions, he relocates to Tyler's run-down house in an industrial location. The two begin having mutually agreeable fights in a bar's parking lot for fun, which draws the attention of other guys and eventually results in the founding of Fight Club, which meets in the establishment's cellar. Tyler demonstrates the rules of the fight club. The first and second of the fight clubs are not to talk about the fight clubs. The third rule states that a battle continues until one party cries "stop," becomes limp, or is knocked out.
The fourth rule is that only two guys should fight at a time. One fight at a time is the fifth rule. The sixth rule is no shoes and no shirts. The seventh rule states that the conflict will continue for however long it takes. The eighth rule states that everyone in the fight club must engage in combat on the first night. The narrator felt so alive in the fight club. Tyler saves Marla, and they start dating after she overdoses on pills while the narrator ignores her scream for aid.
The Arson Unit, which is looking into the explosion that took place in the narrator's home, calls him. It's Detective Stern. According to the detective, someone sprayed Freon into the narrator's front door lock. He also mentions that the stranger used a chisel to shatter the cylinder. The detective asks whether the narrator has any enemies to make homemade dynamite for.
During their phone call, Tyler interrupts and asks the narrator funnily to admit that he was the one who did it. He hangs up. They plan to make soap out of human fat. They steal human fat from the liposuction clinic. He stirs the fat. He mentions that as it hardens, we will skim off a layer of glycerin. By adding nitric acid, we will get nitroglycerin, and by adding sodium nitrate and sawdust, we will get dynamite. With enough soap, one could blow up just about anything he says. Tyler sold the soap for $20 a bar.
More people sign up for Fight Club, and Robert "Bob" Paulson, a man the Narrator met at a cancer support group, is one of them. Bob also mentions the inventor of the fight club, Tyler Durden, who was born in a mental institution and sleeps only one hour a day. Tyler assigns each of them the homework task of instigating a fight with a stranger and losing it the following week. The narrator quits his job and demands the company's assets from his employer to pay for Fight Club. Tyler dreamed up new homework assignments. He handed them out in a sealed envelope.
Tyler makes up the new rule. The applicant can enter and start training after three days of waiting without food or shelter. It went on. Tyler built himself an army. Tyler then recruits the men into Project Mayhem, his new vandalism-committing organization. In response to the Narrator's complaint that he was left out, Tyler asks why the narrator suspects him of the condo explosion. The narrator keeps silent. Then they enjoy the near-life experience by leaving the car to crash and getting into an accident. All of a sudden, Tyler disappears.
After Bob is killed by police during a sabotage operation and Tyler disappears, the Narrator strives to put an end to Project Mayhem. The Narrator follows a paper trail across towns he's been to before and learns that Project Mayhem has spread to the whole country. Many of the men he encounters are unwilling to break the rules. (i.e., either to talk about the fight club or Tyler). Finally, a man confirms that he is not taking any tests and identifies himself as Durden, the narrator. Also, Marla addresses him as "Mr. Durden." The Narrator meets Tyler in the hotel room and has a conversation. He then realizes that he and Tyler are the same person due to a split personality brought on by a mental breakdown.
Tyler intends to eliminate debt by demolishing structures that house credit card records, as the narrator discovers. Marla does not heed his warnings, despite his best efforts. When he goes to the police, the officers threaten him before confessing that they are a part of Project Mayhem. When he attempts to disarm the explosives in one building after leaving the police station, Tyler subdues him and holds him at gunpoint on the top floor.
When the narrator realizes he is the one shooting, he blows a hole through his cheek with the gun while shooting himself in the mouth. Before falling to the ground and dissipating, Tyler was immobilized and had smoke coming out of his skull. Marla, whom the Project members have brought in, finds the Narrator suffering from severe wounds but still alive. As the buildings around them fall apart, they hold hands, and he tells her they met "at a very strange time" in his life.