The story chronicles the journey of fallen German aristocrat Countess Johanna 'Hannele' zu Rassentlow as she dates a Scottish officer of unusual philosophy. The relationship develops into one of D. H. Lawrence's idiosyncratic 'wicked triangles'. The intimate relationship between Captain Alexander Hepburn and Hannele is intruded upon when the captain's wife Evangeline travels to Germany suspicious of foul play.
The plot unfolds with two parallel narratives; one in the symbolic domain, the other a traditional short story narrative about these protagonists. The concurrent symbolic tale that unfolds centers around the central image of The Captain's Doll–after which the story gains its title. This doll is a striking portrait of the Captain, with his "slender legs" and mesmerizing dark stare encapsulated in the silks and calico of a lifeless, inanimate object.
This doll is an ongoing motif throughout the story as it acts as a metaphor for the dehumanizing effects of war on Hepburn – an English gentleman who had been part of the war machine and in the aftermath has come to believe that "we are worth so very little".