Peter Brownrigg, a 14-year-old boy who lives in Cumberland in the north of England, is involved in a night crime against the theft of his village's farmland by Sir Philip Morton. He leaves his village to escape prosecution for throwing a rock at Sir Philip Morton. He first goes to Penrith, but unexpectedly encounters Sir Philip at a performance of Richard III by a touring playing company. He hides from him in a prop coffin (supposed to contain the body of King Henry VI) which is later carried onto the company's cart.
The players discover Peter hiding and the kindly Desmonds, who run the playing company, take him on as a boy actor. Another boy, Kit Kirkstone, also joins the company.
Kit proves excellent at playing female roles while Peter acts as an understudy. After Peter's jealousy leads to a fight, he discovers Kit's secret. Kit is actually a girl in disguise, really called Katharine Russell, who is running away to avoid a forced marriage to Sir Philip, who is only interested in her inheritance.
The company breaks up and the Desmonds promise to take Peter and Kit to a London theatre company. During their trip to London Mr. Desmond breaks his leg in a river accident and Kit almost reveals her true identity to a crowd of observers after swimming down the river to rescue Mr. Desmond, but Peter distracts everyone and saves her. Because of the results of Mr. Desmond's accident Peter and Kit carry on their journey alone. When they arrive in London they audition for Richard Burbage of the Lord Chamberlain's Men at The Theatre in Shoreditch, a neighborhood beyond the northern boundary of the City of London and outside of the jurisdiction of its civil authorities – and consequently an area notorious for licentious behaviour and gaming houses. After being initially turned away by Burbage, they are accepted as apprentices by the playwright William Shakespeare, who recognises Kit's acting ability and Peter's gift of mimicry. They perform in various plays and see Sir Philip in the audience during Romeo and Juliet.
Peter's copy of Shakespeare's new play Henry V is stolen by the "Yellow Gentleman", and Kit and Peter worry that he plans to profit from the unpublished play. While stealing back the script, Peter overhears a discussion between the thief and another man, sounding very treasonous. He also notices an odd poem written on the script. They realise that some of the poem must be part of a code but have no idea how to decipher it.
Peter and Kit take the poem to the Queen's secret service who decode the poorly written sonnet, discovering that the first letter of each line spells SEND NEWS BY PEEL. Peter associates this message with Sir Philip's old peel tower. Peter and Kit set off with Tom Boyd, a member of the Queen's Secret Service. They travel back to Peter's village in disguise to see if Peter's theory about Sir Philip's peel tower is true. Tom is killed by the conspirators and Peter is captured but not before learning that John Somers, an actor in their company, is to shoot the Queen during the first performance of Henry V. This is part of a wider conspiracy to install a new regime in England, the rest of it is vague but they are evidently in league with Spain. Peter is taken for questioning to a deserted Ullswater islet but manages to knock out the guard. He swims to the mainland and narrowly escapes across the fells.
Kit and Peter go to a local magistrate, but discover he is a part of the treasonous plan. They steal his horses, which are of exceptional quality, intending to ride to London to warn the Queen. Sir Philip and his associates give chase. On the road to London they are robbed of their horses, however, this is an unseen blessing because just then Sir Philip and his associates catch up and give chase to the horse thieves, thinking they are Peter and Kit. After continuing on foot they meet Desmond and the rest of the company who are rehearsing Edward II. On hearing of the conspiracy, Desmond vows to stop Sir Philip.
Knowing it is only a matter of time before Sir Philip realises his error and returns, the actors dress up in their soldier costumes and rig the horses to sound like an army ready to attack, with trumpets and drums behind. Kit and Peter pretend to be captives in order to make Sir Philip dismount. Sir Philip is fooled by the group's acting and he and his followers are then taken into custody by Desmond's men. Kit and Peter make a desperate dash back to London, and John Somers is captured by guards moments before he can shoot the Queen. Kit and Peter meet the Queen and tell her their adventures.
In the last paragraph, Peter finishes writing the story and we learn that he and Kit are now married with sons and are living in a lakeside house in Cumberland which is Kit's inherited estate.
