The book opens with Anakin and Obi-Wan returning from a space mission to find Coruscant under attack by a Separatist fleet under General Grievous and Count Dooku, and that Chancellor Palpatine has been kidnapped. They fight their way onto the ship, fight across the ship, and then fight Count Dooku, who is holding Palpatine. Obi-Wan is knocked out, and then Palpatine (whom we the audience have, finally, learned really is Darth Sidious, but Anakin doesn't know that) urges Anakin on in his fight with Dooku. Anakin kills Dooku in the duel. There's some more running around, and a confrontation with Grievous (who then escapes) before Anakin flies the remnants of the ship into a controlled crash on the planet. Anakin, Obi-Wan and Palpatine all walk away (though Palpatine's plan was to have Obi-Wan die in front of Anakin).
Palpatine is calling for even more powers, and the Senate is prepared to give them to him. He wants, in particular, immediate and direct control over the Grand Army of the Republic and control of the Jedi. The Jedi, of course, don't want to let him have either, and are trying to find ways to stymie him. A group of Senators, led by Padme Amidala, is also trying to reign in Palpatine's powers, and presents him with a petition asking him to return his powers to the Senate (the petition isn't presented until very late in the book, though we do see the Senators meeting and discussing the problem several times earlier). Palpatine names Anakin as his representative on the Jedi Council, which makes everyone more unhappy and increases tensions.
Grievous is discovered to be on an out-of-the-way planet on the Rim, and Obi-Wan is sent (alone) to bring him in. Anakin is annoyed that the "team" is being broken up (even though he's staying with his pregnant wife whom he expects to die, and even though he has a very important role as Palpatine's representative to the Jedi -- he's not the sharpest knife in the drawer, our Annie). Yoda is also sent out on a mission, to the Wookies' planet (Anmerkung von Minza: das heißt Wookiee mit zwei e!). The war would seem to be winding down, but Palpatine shows no signs of allowing that, and wants to turn the screws tighter -- he rejects Jedi calls for peace negotiations.
Anakin has been distracted (through the whole book, basically) since he's had prophetic dreams of Padme dying in childbirth (and his previous dreams have always come true). Palpatine strings Anakin along with stories of great Sith knowledge, and the potential to save her life, and eventually reveals himself as Darth Sidious. Anakin returns to the Jedi Temple and tells Mace Windu who Palpatine really is. Windu immediately grabs the three strongest Jedi there, and goes off to "arrest" Palpatine. Palpatine tapes the confrontation (making himself seem weak and helpless), then kills the four Jedi and starts his immediate purge of the Jedi (getting Anakin to do much of the work at the Jedi Temple, backed up by clone soldiers, who across the galaxy are having their secret "kill all Jedi" orders revealed). Palpatine stuns the Senate the next morning with news of what he calls a Jedi attempt on his life, and declares the beginning of the first Galactic Empire.
Obi-Wan and Yoda both survive, though no other Jedi are seen to live through the assault. They both make their way back to Coruscant, where Obi-Wan meets with a practically-in-labor Padme. Anakin has, at the same time, been sent off to yet another hole-in-the-wall planet to kill the remaining Separatist leadership. Obi-Wan rushes off to confront him, while Yoda will fight Palpatine simultaneously. Yoda is defeated by Palpatine but manages to escape (with the help of Senator Bail Organa). Padme had chased Anakin to his planet, and they are quickly joined by Obi-Wan. Anakin is jealous of Obi-Wan (who he thinks might have something going on on the side with Padme). Padme is left unconscious for reasons I no longer remember, and the two Jedi fight. Obi-Wan eventually wins, with Anakin left legless and armless near a lava flow. But Obi-Wan has to flee, because Palpatine is rapidly approaching in his ship (starships are used like taxis in this story). He runs away with Padme, who gives birth (to twins) and dies on board Bail Organa's ship. Organa will take the female twin, Leia, to raise as his own daughter. Obi-Wan takes the boy, Luke, to leave with Anakin's relatives on Tatooine (and keep an eye on the boy himself). Yoda insists that they not be trained as Jedi in any way whatsoever, for obscure Yoda reasons.