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Harry Haller is a very depressed man. He has rented a room in a boarding house and it is full of books and and alcohol. He believes himself to be a "Steppenwolf", or a "wolf of the Steppes", which is a coyote. He believes that he is half man, half wolf and that is why he has trouble fitting in with society. Regularly, Haller walks around the city and goes to bars to get drunk. However, one day he sees a sign above a door that says "MAGIC THEATER/NOT FOR EVERYBODY" and later "FOR MADMEN ONLY". Haller attempts to go into the door, but when it does not open, he leaves for a bar.

On his way home, he sees a man holding a sign that is similar to the one he saw earlier. The man gives him a book called Treatise on the Steppenwolf. The book is about a man named Harry, who is also a Steppenwolf. Haller realizes that this book describes him almost perfectly. Later he meets an old colleague who is a professor. The professor invites him to dinner, but when Haller goes, he ends up insulting the proffesor and his wife. Harry leaves in a flurry.

After that, he goes to a bar and meets a woman named Hermine. He is intrigued by her, even though she bosses him around and makes fun of him. They meet at the bar again the next week and she tells him that she will help him come out of his shell, by teaching him how to dance and listening to more modern music.