Clary returns to the Institute after receiving a text message from Isabelle "Izzy" Lightwood, saying that Jace angered the Inquisitor, Imogen Herondale. He has been imprisoned in the Silent City and is awaiting trial by the Soul Sword to determine if he is telling the truth about being in league with Valentine. The Sword is one of the Mortal Instruments, alongside the Cup and the Mirror. While the Cup is capable of creating new Shadowhunters, the Sword forces Shadowhunters to tell the truth. Valentine kills the Silent Brothers to obtain the Sword.
Clary, Izzy, and Alec respond to a distress call from the Silent City but arrive too late. Clary frees Jace using an amplified version of the opening rune that appears to her amidst her panic. The Inquisitor appears, along with a group of armed Shadowhunters, and accuses Jace of helping Valentine.
Magnus Bane is called to the scene by Alec, and offers to keep Jace as a prisoner in his apartment, while he and the others try to figure out Valentine's plans. Magnus and Alec are close to each other, and have even gone on a date. This is detailed in the Bane Chronicles, a tag-a-long book to the series.
Jace receives an offer from the Queen of the Seelie to visit her court. She is a Downworlder, a fairy with demon heritage. Jace, Simon, Izzy and Clary try to convince her to aid them in the defeat of Valentine. The Queen says she is not sure if she will help and mentions their court knows deep secrets, like how Jace and Clary are their father's experiments come to life. Confused, the group decides to leave.
However, Clary is tricked into consuming faerie food, and is only able to leave by kissing "whom she most desires". Simon offers to kiss her, but the Queen reveals he is not the one "she desires most". This is hurtful because Clary has been repeatedly attempting to date Simon, in order to squash her feelings for Jace, her brother. Clary and Izzy suggest that the kiss might be from Jace. The three are reluctant at first because Clary is Jace's sister, but after Izzy insists that she too would kiss Alec to free him, Jace kisses Clary. The kiss becomes passionate, and afterwards, Clary is free, proving that Jace's kiss is the one she most desires. This upsets Simon, who storms off after they return to their realm. Jace and Clary confess their love to each other. Clary is torn between her love for Jace, and the taboo against it because they are blood relatives. Jace suggests keeping a secret relationship. Clary, unwilling to lie to their friends and family, replies that it would eventually be discovered.
Later, the vampire Raphael shows up at the Institute with Simon, who is on the verge of death. Apparently, Simon's initial intake of vampire blood as a rat made him believe he was turning into a vampire, and he went to the Hotel DuMort to see Raphael. He then was devoured by vampires, mixing his blood with theirs.
Simon is buried and transforms into a vampire. A distraught Clary ignores 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 the werewolf comes into the house with wounds too severe for Luke to treat. Magnus heals her while Luke decides to check outside the house to see if the demons are still there. Luke is attacked and gets badly injured. Jace, Simon, and Clary battle the demons, who flee after seeing Clary's rune on her forearm which she got during a dream of her mother blessing her.
They return to the house to rest with the others and end up talking about the powerful rune Clary used to free Jace earlier. Clary reveals it was something she just thought of, and everyone opposes her, saying that runes can only be 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 then. Alec approaches his parents, saying he is seeing someone who is a Downworlder. Magnus silences him before he says who he is dating. Alec claims not to remember anything. He gets nervous and defensive when asked who he is dating, leading them to believe that the rune worked.
Everyone decides to sleep, but Jace secretly takes 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 with him. The next morning, the Inquisitor, knowing of that meeting, once again imprisons Jace, planning to make a trade with Valentine - Jace's life for the Sword. Jace tries to tell her that it will not work, which the Inquisitor refuses to believe and devises a plan of revenge on Valentine, who had killed her son, Stephen Herondale.
While traveling to see Simon, Maia is attacked by a demon, who comes to her in the form of her dead brother, after which Valentine kidnaps her.
Clary and the others rescue Maia with the help of Magnus, but not before Valentine drains Simon's blood. 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, the Inquisitor begins to suggest something about who his parents are, but she jumps in front of Jace, saving him from a demon before she can finish. She later dies, leaving Jace confused at her sudden change of heart.
Meanwhile, one of Valentine's demons kidnap Clary. At his boat, Valentine intimidates her with the Sword. Jace and Simon rescue her and Valentine admits that Jace only chose to fight on his side because he loves Clary more than a sister. He knew of this when Jace saw a demon that transforms into the thing you fear the most, which appeared to him in the form of Clary dying. The second time he saw the demon it appeared to him as Valentine, and Jace continued to kill the demon. Clary draws 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 the nixies the 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 light. After a talk with Luke about love and his regrets of not telling Clary's mother how he felt about her, Clary 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 one of Jocelyn's friends and says she knows how to wake up Clary's mother.
