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Hugh Conway, a veteran member of the British diplomatic service, finds inner peace, love and a sense of purpose in Shangri-La, whose inhabitants enjoy unheard-of longevity.
The prologue and epilogue are narrated by a neurologist. This neurologist and a novelist friend, Rutherford, are given dinner at Tempelhof, Berlin, by their old school-friend Wyland, a secretary at the British embassy. A chance remark by a passing airman brings up the topic of Hugh Conway, a British consul in Afghanistan, who disappeared under odd circumstances. Later in the evening, Rutherford reveals to the neurologist that, after the disappearance, he discovered Conway in a French mission hospital in Chung-Kiang (probably Chongqing), China, suffering from amnesia. Conway recovered his memory, told Rutherford his story (which Rutherford recorded in a manuscript), and then slipped away again.
Rutherford gives the neurologist his manuscript, which becomes the heart of the novel.