The story is narrated in the first person as an autobiographical memoir told by the titular horse named Black Beauty—beginning with his carefree days as a foal on an English farm with his mother, to his difficult life pulling cabs in London, to his happy retirement in the country. Along the way, he meets with many hardships and recounts many tales of cruelty and kindness. Each short chapter recounts an incident in Black Beauty's life containing a lesson or moral typically related to the kindness, sympathy, and understanding treatment of horses, with Sewell's detailed observations and extensive descriptions of horse behavior lending the novel a good deal of verisimilitude.

The book describes conditions among London horse-drawn cab drivers, including the financial hardship caused to them by high license fees and low, legally fixed fares. A page footnote in some editions says that soon after the book was published, the difference between 6-day cab licenses (not allowed to trade on Sundays) and 7-day cab licenses (allowed to trade on Sundays) was abolished and the cab license fee was much reduced.