American Gods tells the story of Shadow, an ex-convict who is hired by the mysterious Mr. Wednesday after he gets out of prison. As they crisscross the country, seeking out strange people for some unknown purpose, Shadow is thrust into other realities, is threatened by ancient gods, and realizes that he has been manipulated in more ways than one. The novel incorporates mythological traditions from many different cultures and explores the themes of loyalty, trickery, tradition, and sacrifice.
The central premise of the novel is that gods and mythological creatures exist because people believe in them (a form of thoughtform). Immigrants to the United States brought with them spirits and gods. The power of these mythological beings has diminished as people's beliefs wane. New gods have arisen, reflecting America's obsessions with media, celebrity, technology, and drugs, among other things.
Shadow is a taciturn convict who is released from prison early when his wife, Laura (McCabe) Moon, and best friend Robbie Burton die in a car accident, leaving him alone in the world. Bereft, he takes a job as a bodyguard for a mysterious conman called Mr. Wednesday, who seems to know more about Shadow's life than he lets on. Shadow and Wednesday travel across America visiting Wednesday's unusual colleagues and acquaintances until Shadow learns that Wednesday is in fact an incarnation of Odin the All-Father. Wednesday is recruiting American manifestations of the Old Gods of ancient mythology, whose powers have waned as their believers have decreased in number, to participate in an epic battle against the New American Gods, manifestations of modern life and technology such as the Internet, media, and modern means of transport. Shadow meets many gods and magical creatures, including Mr. Nancy (Anansi), Czernobog, and a leprechaun named Mad Sweeney who gives Shadow a magical gold coin. Shadow tosses the coin into his wife's grave, inadvertently bringing her back from the dead as a semi-living revenant.
Shadow and Wednesday try to rally the Old Gods to fight the new, but most are reluctant to get involved. The New Gods abduct Shadow (utilizing a group of shadowy Men in Black led by the mysterious Mr. World), but Laura rescues him, killing several Men in Black in the process. Wednesday hides Shadow first with a few stray Egyptian gods (Thoth, Anubis, and Bast, here as Mr. Ibis, Mr. Jaquel, and a common brown housecat) who run a funeral parlor in Illinois, and then in the sleepy Great Lakes community of Lakeside. Shadow meets many colorful locals in Lakeside including Hinzelmann, an old-timer who spins tall tales, and Chad Mulligan, the workaday local chief of police. Lakeside is tranquil and idyllic but Shadow suspects something is not quite right about the town. While neighbouring communities turn into ghost towns, Lakeside is mysteriously resilient. Disappearances of children occur with unusual frequency. Shadow is unable to investigate further, busily travelling across America with Wednesday, meeting the likes of Johnny Appleseed and the goddess Easter to solicit their help. They are pursued all the while by the Men in Black, particularly Mr. Town, who blames Shadow for the death of his friends.
Finally the New Gods seek to parlay with Wednesday, but they murder him at the meeting. This act galvanizes the other Old Gods into action and they rally behind a common banner to face their enemies in battle. Shadow is bound by his contract with Wednesday to hold his vigil by re-enacting Odin's time hanging from a "World Tree" while pierced by a spear. Shadow dies and visits the land of the dead, where he is guided by Thoth and judged by Anubis. Easter later brings him back to life. During his time between life and death, Shadow learns that he is Wednesday's son, conceived as part of the deity's plans. He realizes Mr. World is secretly Low-key (Loki) Lyesmith and that Odin and Loki have been working a "two-man con". They orchestrated Shadow's birth, his meeting of Loki in disguise in prison and Laura's death. As part of the con, Loki had ordered Odin's murder so that the battle between the New and Old Gods would serve as a sacrifice to Odin, restoring his power, while Loki would feed on the chaos of the battle.
Shadow arrives at Rock City, the site of the climactic battle, in time to stop it. He explains that both sides have nothing to gain and everything to lose, with Odin and Loki as the only true winners. America is a bad place for Gods, Shadow tells them, and recommends they return home. The Gods depart, Odin's ghost fades, and Laura impales Loki on a branch of the World Tree. She finally dies after Shadow takes the magical coin from her.
Shadow returns to Lakeside, where he finally stumbles on the town's secret. The missing children are abducted by Hinzelmann, who is a kobold. Hinzelmann blessed and protected the town, making it prosper despite the hardships plaguing the rest of the region, in exchange for the town's unwitting sacrifice of their young. After a confrontation with Shadow, Hinzelmann is killed by Chad Mulligan.
In Iceland, Shadow meets another incarnation of Odin who was created by the belief of the original settlers of Iceland, and is therefore much closer to the Odin of mythology than Wednesday was. Shadow accuses Odin of Wednesday's actions, whereupon Odin replies that "He was me, yes. But I am not him." Shadow gives Odin Wednesday's glass eye, which Odin places in a leather bag as a keepsake. Shadow performs a simple sleight-of-hand coin trick, which delights Odin enough that he asks for a repeat performance. Shadow then performs a small bit of real magic, pulling a golden coin from nowhere. He flips it into the air and, without waiting to see if it ever lands, walks down the hill, away from the god and out into the world.
The book also features many subplots and cutaway scenes detailing the adventures of various mythical beings in America: The Queen of Sheba works as a prostitute, staying young and powerful by preying on the men she sleeps with; a salesman from Oman meets a cab-driving Ifrit; the first Viking explorers to come to America bring their gods, including Odin, with them; a Cornish woman turns fugitive in the new world, inadvertently populating it with the pixies and fairies of her native country; slaves from Africa populate the Caribbean Islands and America with their tribal gods; and in 14,000 BC the gods of the very first American immigrants are born.