The story describes a world in which almost all humans have lost the ability to live on the surface of the Earth, and most of the human population lives below ground. Each individual lives in isolation in a standard 'cell', with all bodily and spiritual needs met by the omnipotent, global Machine. Travel is permitted but unpopular and rarely necessary. The entire population communicates through a kind of instant messaging/video conferencing machine called the speaking apparatus, with which they conduct their only activity, the sharing of ideas and knowledge with each other. The two main characters, Vashti and her son Kuno, live on opposite sides of the world. Vashti is content with her life, which she spends producing and endlessly discussing secondhand 'ideas', as do most inhabitants of the world. Kuno, however, is a sensualist and a rebel. He is able to persuade a reluctant Vashti to endure the journey (and the resultant unwelcome personal interaction) to his cell. There, he tells Vashti of his disenchantment with the sanitized, mechanical world. He confides to her that he has visited the surface of the Earth without permission, and without the life support apparatus supposedly required to endure the toxic outer air, and that he saw other humans living outside the world of the Machine. He goes on to say that the Machine recaptured him, and that he has been threatened with 'Homelessness', that is, expulsion from the underground environment and presumed death. Vashti, however, dismisses her son's concerns as dangerous madness and returns to her part of the world.
As time passes, and Vashti continues the routine of her daily life, two important developments occur. First, the life support apparatus required to visit the outer world is abolished. Most humans welcome this development, as they are skeptical and fearful of first-hand experience and of those who desire it. Secondly, a kind of religion is re-established, in which the Machine is the object of worship. People forget that humans created the Machine, and treat it as a mystical entity whose needs supersede their own. Those who do not accept the deity of the Machine are viewed as 'unmechanical' and are threatened with Homelessness.
During this time, Kuno is transferred to a cell near Vashti's. He comes to believe that the Machine is breaking down, and he tells Vashti cryptically, "The Machine stops." For a time, Vashti continues with her life, but eventually defects begin to appear in the Machine. At first, humans accept the deteriorations as the whim of the Machine, to which they are now wholly subservient. The situation continues to deteriorate, as the knowledge of how to repair the Machine has been lost over the years, and finally the Machine apocalyptically collapses, bringing 'civilization' with it. Kuno comes to Vashti's ruined cell, however, and before they perish they realize that Man and his connection to the natural world are what truly matter, and that it will fall to the surface-dwellers who still exist to rebuild the human race and to prevent the mistake of the Machine from being repeated.
In the preface to his Collected Short Stories (1947), Forster wrote that "The Machine Stops is a reaction to one of the earlier heavens of H. G. Wells" (although not all Wells' stories were optimistic about the future). Clearly, even in 1909 Forster was deeply concerned that Man was in danger of becoming unable to live without the technology that he created, and of forgetting that it was he who created it.
The story predicted several technological and social innovations, such as the 'cinemataphote' (television) and videoconferencing. Forster also sought to establish the value of direct experience, which is threatened by excessive involvement in virtual communities. This shows remarkable foresight, and the book describes many nuances of "online life" over 70 years before the Internet was even invented. The final destruction of the mechanical society of the Machine is not without hope, in that Kuno and Vashti recapture a part of the spirit of life and embrace each other for the first time, a mother and her son.