Jocelyn has not woken up yet, so Clary is now living at Luke's house. Clary's emotions are tangled when Simon kisses her and starts calling her his girlfriend. Jace has been exiled from the Institute under suspicions of being a spy for Valentine. He heads to a bar, Hunters Moon, having nowhere to live now, only to discover that a werechild was slain nearby and that the pack wants his help. Jace refuses to help and is attacked by the pack, only to be saved by Luke. After some prompting by Luke, Jace goes to the Institute to confront Alec and Isabelle's mother who had kicked him out, who reveals that the Inquisitor was coming and she was only trying to spare him.
Clary returns to the Institute and receives a text message from Isabelle saying that Jace has angered the Inquisitor and has been imprisoned in the Silent City. While sitting in his cell, Jace hears something attacking the Silent Brothers and discovers that Valentine has killed them to get the second Mortal Instrument - the Mortal Sword. Clary, Isabelle, and Alec respond to a distress call from the Silent City, only to discover the slaying of the Silent Brothers. Clary frees Jace using an amplified version of the opening rune, that just crossed her mind, only for the Inquisitor to appear and accuse Jace of going along with Valentine, since Jace was supposed to go on trial by the sword and now it is gone. Magnus Bane offers to keep Jace as a prisoner in his apartment, where he and the others try to figure out Valentine's potential plans. Jace later receives an offer from the Queen of the Seelie Court to visit her court. Jace goes with Simon, Isabelle and Clary. The group convinces the Queen to help them defeat Valentine, while the Queen says she is still not sure and also mentions how their court knows deep secrets, like how Jace and Clary are their father's wonderful experiments come to life. The group is confused and decides to leave. However, Clary is tricked into consuming faery food, and is only allowed to leave by kissing "whom she most desires". At first Simon kisses her unexpectedly, thinking the wanted kiss might be his. However, the kiss does not free Clary and Isabelle suggests that the kiss might be from Jace. The three are reluctant at first, what with Clary being Jace's sister, but after Izzy insists that she too would kiss Alec if only to free him, Jace kisses Clary. The kiss suddenly becomes intense and passionate, and afterwards Clary is free, proving that Jace's kiss is the one she most desires. This hurt Simon, so he storms off after they return to their realm. Jace and Clary confess their love to each other and Clary immediately regrets it. Jace suggests keeping a secret relationship, to which Clary replies that it would eventually be discovered and that she is unwilling to lie to their friends and family.
Later, Raphael shows up at the Institute with Simon who is on the verge of death. The vampire explains that Simon's small initial intake of vampire blood earlier at the Hotel Dumont made Simon believe he was turning into a vampire, and he went to the Hotel Dumont to see Raphael. He then was devoured by vampires, mixing his blood with theirs. Thus, as the only way left to save him, Simon is buried and transforms into a vampire, which causes a distraught Clary to ignore Jace as a result of her concern over Simon and his new undead status. While discussing how to potentially tell Simon's mother about his vampire transformation with Clary, Maia comes into the house with wounds too severe for Luke to treat. Magnus heals Maia while Luke decides to check outside to see if the demons are still there. Luke is attacked and gets badly injured. Jace, Simon, and Clary battle the demons outside of the house. The demons flee after seeing Clary's rune on her forearm which she got during a dream of her mother blessing her Shadowhunter path. They return to the house to rest with the others and end up talking about the remarkably powerful rune Clary used to free Jace earlier. Clary reveals that it was something she just thought of, and everyone opposes her, saying that nobody can simply make up a rune as it is created by angels. Clary is dared to make a new rune, and she ends up making a fearless rune, as suggested by Jace. They try it on Alec, whose parents and sister arrive suddenly. Alec suddenly approaches his parents, saying he's seeing someone who is a Downworlder. Magnus magically silences him before he says who he is dating and he's startled, as if he just woke up. Alec claims not to remember anything, and suddenly gets nervous and defensive when asked who he is dating, leading them to believe that the rune actually worked. Everyone decides to sleep, but Jace secretly borrows Raphael's motorcycle and meets Valentine at a ship. Valentine offers protection to his loved ones if Jace joins him and comes back to Idris. Jace is silent, but the next morning the Inquisitor comes to claim that Jace was with Valentine and threatens to kill Jace if Valentine does not return the Mortal Instruments. At Jace's denial, the Inquisitor once again imprisons Jace, planning to make a trade with Valentine - Jace's life for the Mortal Instruments. Jace tries to tell her that it will not work, which the Inquisitor refuses to believe as she devises a plan of revenge on Valentine because he killed her son. While she is traveling to see Simon, Maia is attacked by the Demon of Fear, Agramon, who comes to her in the form of her dead brother, after which Valentine kidnaps her.
Clary and the others discover Maia's kidnapping and rescue her with the help once again of Magnus, but not before Valentine kills the newborn Simon. Jace manages to restore life to Simon by feeding him his blood, after which the Inquisitor appears. After seeing Jace's star-shaped scar on his shoulder, she begins to suggest something about who his parents are, then suddenly kills a demon that was attacking him. She dies during the process, leaving Jace confused at her sudden change of heart.
Meanwhile, one of Valentine's demons kidnaps Clary and brings her to his boat where Valentine intimidates her with the Mortal Sword. Jace and Simon find and rescue her and Valentine admits that Jace only chose to fight on the Shadowhunter side because he loves Clary more than as a sister. He knew of this when Jace saw Agramon in the form of Clary dying the first time it met him, and Jace reveals he has killed Agramon the second time he met it in the form of Valentine. Jace throws Clary's stele to her and Clary quickly makes an opening rune on the ship's metal, which causes all of the ship's pieces to open up, making it explode. Clary falls in the river and is saved by nixies the Seelie Queen sent to help. The group escapes by truck, where Simon discovers that Jace's blood has made him a "Daylighter", a vampire that can tolerate the sun's heat. After a talk with Luke about love and his regrets of not telling Clary's mother how he felt about her, Clary finally decides to tell Jace of her love for him and her sudden change of mind to start a relationship, regardless of its consequences. However, before she can say anything, Jace tells her that he will only act as her brother from then on, breaking her heart. As Clary reels from this, she meets a woman who introduces herself as Madeleine, one of Jocelyn's friends, and says that she knows how to wake up Clary's mother.