Higgs, a sheep farmer, and Chowbok, an old man, decide one day to visit the forbidden country that lies beyond the mountains. When they find a pass through the mountains, Chowbok gets frightened and runs home, so Higgs goes on alone. After a dangerous journey, he wakes one morning surrounded by beautiful shepherdesses. They take his belongings, give him a medical exam, and throw him in jail.

There he learns that he has come to Erewhon (an anagram for nowhere). In this country, illness is considered a crime. Sick people are thrown in jail; sickness is their own fault. Even sad people are imprisoned, for grief is a sign of misfortune and people are held responsible for actions that made them unfortunate. People who rob or murder, on the other hand, are treated kindly and taken to the hospital to recover. No machines are allowed in Erewhon as one philosopher thought that machines could rapidly evolve and take over the world.

Higgs is invited to dinner with Nosibor, a recovering embezzler. He stays with his family and falls in love with his youngest daughter Arowhena. Nosibor insists that the eldest daughter marry first, so Higgs goes to study at the University of Unreason, where students study anything that has absolutely no practical purpose. Arowhena and Higgs meet there secretly and when Nosibor finds out, he is very angry. Higgs and Arowhena fly away on a balloon. They land in the sea and are taken to England where they marry and plan a missionary trip to Erewhon.