Fifteen-year-old Clary Fray goes to the Pandemonium Club with her best friend, Simon Lewis. Inside, she sees a blue haired boy and a gorgeous black haired girl sneaking off to be alone in a storeroom. Then she notices two boys following them into the storeroom and one of them is armed with what appears to be a knife. No one else seems to notice them, but she gets Simon to go for help and then decides to follow the group into the storeroom. At first glance it appears to be empty, but she is suddenly able to see them. She listens to a bizarre conversation about demons and then witnesses the blue haired "boy" being killed. However, after he is killed he somehow vanishes from the room. The explanation she is given is that demons "return to their home dimensions when they die." (Clare, 2013, p. 15) Before she can really begin to understand what she has seen and heard, Simon enters the storeroom with the bouncer in tow and questions why she is in there by herself. Realizing no one else can see the others, she mumbles an apology about being mistaken about what she saw.
When she returns home, her overprotective mother, Jocelyn, scolds her for staying out so late and worrying her. The next day, Jocelyn announces that they are moving from New York City to the country for the summer where Jocelyn's best friend, Luke, has a house. Clary, upset about the unexpected move, leaves with Simon and later confides that she knows almost nothing about her mother or her entire family. Simon mentions seeing thin, white scars on Jocelyn's back and shoulders, but Clary dismisses this, having never noticed them. She ignores her mother's continual phone calls as they go to a poetry reading where Clary sees Jace, one of the teens she saw at Pandemonium. He privately tells Clary about demon-hunters, called Shadowhunters or Nephilim. The person killed at the club was a demon in human form. Jace claims Clary is not a mundane (mortal human) because beings like him are invisible to ordinary humans. Clary finally answers a call from Jocelyn, who frantically warns her not to come home and to tell Luke that "he" has found her. The call ends abruptly.
After trying in vain to call her mom back, Clary breaks her phone and grabs Jace's, which turns out to be a "sensor", hits him, and runs off. Clary then runs back to her house and it an absolute mess. She screams for her mom, but no one answers. Then, Clary encounters a creature that is bent on killing her, but she is able to kill it with Jace's sensor. Jace brings Clary back to the "institute", the place where the New York shadow hunters live. Clary meets the other shadow hunters, Isabelle and Alec, and the tutor, Hodge. Jace and Clary go back to Clary's house and meet her neighbor. Her neighbor has a portal, and Clary decides to go through to see where her mother would've gone.
Clary, followed by Jace, rushes through the portal, landing at Luke's bookstore and finding Simon hiding in the bushes. Simon was trying to find out what happened to Clary. He observed Luke packing several weapons inside his bag. The three hide inside the store. Luke returns with two men, Pangborn and Blackwell, whom Valentine sent to interrogate Luke about the Mortal Cup's whereabouts. Luke claims he does not know where Jocelyn, who is in a coma, hid the Mortal Cup and has no interest in her or the cup. He refuses to negotiate with them or interfere with Valentine's plans. Clary and Jace, accompanied by Simon, go back to the Institute and tell Hodge what they learned. Hodge tells them about the Circle, a group of Shadowhunters that Valentine formed to eliminate all Downworlders (vampire, werewolves, faeries, warlocks, and others). Jocelyn, Valentine's wife, was forced to join. It was believed she had died in a fire that destroyed Valentine's home. Jocelyn's real maiden name is Jocelyn Fairchild, which means Clary's dad was Valentine. Somewhere in here Clary and Jace go to the Silent City to speak to the Silent Brothers. They tell them that there is a block in her mind that prevents her from remembering the Shadow World. The warlock that put it there was Magnus Bane.
When Isabelle found an invitation in the demon's pocket (the one that Jace had killed at the Pandemonium Club) she took it. It was an invitation to a warlock's party hosted by Magnus Bane. Clary goes with her and the others. Clary meets Magnus Bane, who says his spell is too complex to remove but will fade naturally if it is not re-enforced every two years. Jocelyn had Magnus Bane place a protective spell on Clary's mind to prevent her seeing the Shadow World. During the party, Simon ignores Isabelle's warning and drinks a blue liquid that transforms him into a rat. Vampires take him thinking Simon was one of their own. Clary and Jace trail them to an abandoned hotel to rescue Simon. Jace, Clary, and rat-Simon escape when werewolves invade the hotel and battle the vampires. Jace seems upset when Simon and Clary embrace after he becomes human again.
That night, Jace takes Clary to the Institute's greenhouse on a midnight picnic to celebrate Clary's sixteenth birthday, and their romance blossoms with a romantic first kiss.
As the block continues fading and her memories begin emerging, Clary deduces that the Mortal Cup is hidden inside one of Madame Dorothea's tarot cards. Clary and the others go to Dorothea's apartment. Clary retrieves the Cup, but a demon appears from the Portal and possesses Madame Dorothea. Aided by Simon, they escape and return to the Institute where Hodge betrays them by handing over the Cup and an unconscious Jace to Valentine. Hodge flees, pursued by Clary. Hodge attacks her in an alleyway, but she is unexpectedly saved by Luke, who is a werewolf.
Luke and Clary devise a plan to storm Valentine's secret stronghold with help from Luke's werewolf pack. While the werewolves attack Valentine's followers, Clary locates her mother, who is unconscious, and also finds Jace, who says Valentine told him he is his son. Having developed romantic feelings for each other, both Clary and Jace are aghast at realizing they are brother and sister. Clary says that despite Valentine being their father, he is evil. Valentine appears and entices Jace to return to Idris with him. Jace refuses, and Valentine escapes through a portal with the Cup, smashing the portal behind him.