Peace Like a River is the story of the young boy Reuben Lands, son of the miracle-working janitor Jeremiah. The asthmatic Reuben and his two siblings are drawn into a series of scuffles and crimes that bring them into the company of Jape Waltzer, a murderous man who, in combination with Jeremiah's bout of pneumonia, upsets their quiet life. Eventually they manage to disentangle themselves, but Jeremiah passes away, taking Reuben's asthma with him as a final miraculous act.
The novel, set largely in 1962 is narrated by Reuben Land, the asthmatic eleven-year-old antagonist. The story also includes his older brother Davy and younger sister Swede. His father, Jeremiah, a school janitor, is a deeply spiritual Protestant who occasionally performs miracles, of whom Reuben is the sole witness.
The Lands' lifestyle is disrupted when troublemakers Israel Finch and Tommy Basca attempt to molest Davy's girlfriend and are prevented by Jeremiah. Afterward, they attempt revenge by kidnapping Swede but return her unharmed. Davy kills them after provoking them to enter his home, leading him to be tried for manslaughter.
At the trial, Reuben is the only eyewitness of the killing and though determined not to betray his brother, he gives a compromising testimony that ensures the probability of a conviction. Before the conclusion of the trial, Davy escapes the jail. Federal agent Martin Andreeson leads the investigation and intrudes upon Davy's home by asking of his whereabouts.
Jeremiah becomes ill with pneumonia, leaving Reuben and Swede to operate the household until his recovery. After Jeremiah recovers, they learn of traveling salesman Tin Lurvy's death. He left them his Airstream trailer, which they take in search of Davy. At first they leave for their friend August Schultz's farm, having received suggestion that Davy might be there. When they arrive, they find Davy has come and gone and pursue him.
Later in the journey, the family visit a service station and remain at length as guests of its widowed owner Roxanna, who assumes a maternal role toward the children. Reuben discovers Davy by accident. Davy is accompanied by the eccentric Jape Waltzer and his ward Sara.
Thereafter, Reuben visits them several times, but is forbidden by Davy to tell the family. Waltzer claims to have "bought" Sara from her father in Utah and raises her with the intention of later marrying her. Eventually, Andreeson reaches the family again and suspects that Davy is nearby; Jeremiah, after much prayer, co-operates with him. Reuben worries Waltzer will kill Andreeson if discovered so Reuben leads a search party to the hideout, but he deliberately misleads the searchers, causing one to be injured. The posse discover the hideout, but find it abandoned. They find Andreeson's discarded fedora, leading them to believe he has been killed. They are right, as he was bludgeoned to death by Jape Waltzer and dumped into a vein of burning lignite.
The family returns to their home in Minnesota, where Jeremiah marries Roxanna. Three months later, Davy appears at their home with Sara, claiming that Jape had decided to marry Sara, and they fled. Having pursued them, Waltzer fires on Jeremiah and Reuben.
In the next chapter, Reuben undergoes a near-death experience where he sees himself as someone who can breathe normally and run freely. During the vision, he and his father approach a city, apparently of the dead, to which Jeremiah is admitted and Reuben forbidden. Reuben then awakes to find his father dead and himself still breathing, his asthma cured.
In the epilogue, Swede becomes a novelist. Reuben sometimes visits Davy (who lives in a small Canadian town on the plains) but concludes his narrative by referencing his father's miracles and the afterlife he glimpsed himself. Reuben also marries Sara.
Waltzer escapes crime and his whereabouts remain unknown.
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