The story begins with an introduction. Tom Walker, and his wife are described as miserly and bitter towards each others. The couple even goes as far as hiding money from each other.
Tom Walker is approached by the devil to make a deal with him. The devil offers him Pirate Kidd's treasure which is buried nearby. This will make him very wealthy.
Tom goes home to think about the deal. However, after his wife urges him to do it, he spites her by refusing. Therefore, she goes into the woods herself to make the deal and doesn't return. With his wife gone, Tom revisits the devil's pact and becomes a usurer in Boston.
Tom becomes very wealthy but begins to worry about his soul. It is clear that he regrets his deal and tries to repent by reading the Bible and attending church, but he remains in his nefarious business. Then one day, he hears three loud knocks at his door!
The devil arrived to collect his due: Tom's soul.
The people of Boston appointed a board to oversee Tom's estate. However, when they looked for all the money he had made, there was nothing left. Legend remains that to this day, the black horse and a figure in a white cap can be seen on the marsh, "which is doubtless the troubled spirit of the usurer".