The story is presented as a manuscript "found among the papers of the late Francis Wayland Thurston, of Boston". In the text, Thurston recounts his discovery of notes left behind by his granduncle, George Gammell Angell, a prominent Professor of Semitic languages at Brown University in Providence, Rhode Island, who died suddenly in "the winter of 1926–27" after being "jostled by a nautical-looking negro".
The first chapter, The Horror in Clay, concerns a small bas-relief sculpture found among the papers, which the narrator describes: "My somewhat extravagant imagination yielded simultaneous pictures of an octopus, a dragon, and a human caricature.... A pulpy, tentacled head surmounted a grotesque and scaly body with rudimentary wings." The sculpture is the work of Henry Anthony Wilcox, a student at the Rhode Island School of Design who based the work on his delirious dreams of "great Cyclopean cities of titan blocks and sky-flung monoliths, all dripping with green ooze and sinister with latent horror." Wilcox frequently references the terms Cthulhu and R'lyeh, and Angell also discovers reports of "outre mental illnesses and outbreaks of group folly or mania" around the world (in New York City, "hysterical Levantines" mob police; in California, a Theosophist colony dons white robes to await a "glorious fulfillment")...