The tale opens not with a person but with a valley. In a quiet glen near the Hudson, settled long ago by the Dutch, a drowsy spell is said to hang in the air. The locals are dreamers given to trances, visions, and marvellous beliefs, and the region's presiding ghost is a Headless Horseman, reputed to be a Hessian trooper who lost his head to a cannonball in the Revolution and rides nightly in search of it. Anyone who stays in the valley, the narrator insists, soon catches its habit of seeing apparitions.
Into this place comes Ichabod Crane, a gangling, scarecrow-thin schoolmaster from Connecticut who boards a week at a time with the families whose children he teaches. He is an odd blend of small shrewdness and large credulity, a devout reader of Cotton Mather on witchcraft, a singing-master, a carrier of gossip, and a tireless eater. He delights in ghost stories told by the fire, then dreads the long walk home through the haunted dark that those very stories have peopled for him.
Ichabod sets his heart on Katrina Van Tassel, the pretty, coquettish only daughter of a prosperous farmer. His longing is candid about its motives: gazing over the Van Tassel barns, orchards, and fat livestock, he imagines the whole estate turned into cash and himself riding off to seek his fortune in the wilderness. Standing between him and this dream is Brom Bones, a powerful, roistering young horseman and the hero of the countryside, who has also been courting Katrina.
Too wary to fight Brom openly, Ichabod presses a quiet, insinuating suit, and Brom retaliates with a campaign of practical jokes. The rivalry comes to a head at a harvest party at the Van Tassel farm, an evening of dancing, feasting, and war stories that slides naturally into the telling of local ghost tales, including fresh sightings of the Horseman. Ichabod lingers afterward for a private word with Katrina, then leaves abruptly, crestfallen, his hopes apparently dashed.
Riding home at the witching hour on a borrowed plow-horse, his head crammed with the night's spectres, Ichabod is overtaken by a silent, cloaked horseman who proves to be headless, carrying his head on the saddle before him. A frantic chase ends at the church bridge, where the figure hurls its head and knocks Ichabod sprawling. He vanishes from the valley; next morning only his hat and a shattered pumpkin are found by the brook. The country wives are sure he was spirited away, Brom laughs whenever the pumpkin is mentioned, and a closing postscript leaves the joke deliberately, cheerfully unresolved.