The most evil and powerful dark wizard in history, Lord Voldemort, murdered married couple James and Lily Potter but mysteriously disappeared after attempting to kill their infant son, Harry. While the wizarding world celebrated Voldemort's apparent downfall, Professor Dumbledore, Professor McGonagall and half-giant Rubeus Hagrid place the one-year-old orphan in the care of his surly and cold Muggle (non-magic human) uncle and aunt, Vernon and Petunia Dursley, with their spoiled and bullying son, Dudley.
Ten years later while living in Four Privet Drive, Harry is tormented by the Dursleys, treated more like a slave than a member of the family and forced to live in a cupboard under the stairs. Shortly before his eleventh birthday, a series of letters addressed to Harry arrive but Vernon destroys them before Harry can read them, leading only to an influx of more letters. To evade the pursuit of the letters, Vernon first takes the family to a hotel and, when the letters arrive there too, he hires a boat out to a small island. On Harry's eleventh birthday at midnight, Hagrid bursts through the door to deliver Harry's letter and tells him what the Dursleys have kept from him: Harry is a wizard and has been accepted into Hogwarts. Hagrid takes Harry to Diagon Alley, a magically hidden shopping precinct in London, where Harry is bewildered to discover how famous he is among witches and wizards as "the boy who lived." He also finds that he is quite wealthy since a bequest from his parents has remained on deposit at Gringotts Wizarding Bank. Guided by Hagrid, he buys the equipment he will need for his first year at Hogwarts.
One of the many materials Harry needs to purchase for his upcoming year at Hogwarts is a wand. At the wand shop, he finds that the wand that suits him best is the twin of Voldemort's; both wands contain feathers from the same phoenix. Harry also leaves with a new pet (a birthday gift from Hagrid), an owl he names Hedwig. A month later, Harry leaves the Dursleys' home to catch the Hogwarts Express from King's Cross railway station. There he meets the Weasley family, who show him how to pass through the magic wall to Platform 9¾, where the train that will take them to Hogwarts is waiting. While on the train, Harry quickly befriends Ron Weasley, who tells him that someone tried to rob a vault at Gringotts. They discuss the upcoming school year, for which Harry is both anxious and excited. During the ride, they meet Hermione Granger, who is later to become one of their best friends. Harry also makes an enemy on this trip, fellow first-year, Draco Malfoy. Draco, accompanied by his dim-witted companions Vincent Crabbe and Gregory Goyle, offers to advise Harry, but Harry dislikes Draco for his arrogance and prejudice and rejects his offer of "friendship".
Before the term's first dinner in the school's Great Hall, the first-years are allocated to houses by the Sorting Hat. While Harry is being sorted, the Hat suggests that he be placed into Slytherin which is known to house potential dark witches and wizards, but when Harry objects, the Hat sends him to Gryffindor, Slytherin's rival house. Ron and Hermione are also sorted into Gryffindor. Draco is sorted into Slytherin house, which his family has been traditionally sorted into for many years. During the meal, Harry catches Professor Severus Snape's eye and feels pain in the scar Voldemort left on his forehead.
After a terrible first Potions lesson with Snape, Harry and Ron visit Hagrid (groundskeeper of Hogwarts), who lives in a cabin on the edge of the Forbidden Forest. There they learn that the attempted robbery at Gringotts occurred the day Harry withdrew money from his vault. Harry remembers that Hagrid had removed a small package from the vault that had been broken into.
During the first years' first broom-flying lesson, fellow Gryffindor Neville Longbottom breaks his wrist and is rushed to the infirmary by their instructor. Draco takes this advantage to throw the forgetful Neville's fragile Remembrall, which Neville dropped because of his accident, high in the air. Harry gives chase on his broomstick, catching the Remembrall inches from the ground. Unbeknownst to Harry, Professor McGonagall, who is head of Gryffindor house, has witnessed his performance on his broom. She dashes out and appoints him as the new Seeker for the Gryffindor Quidditch team.
When Draco tricks Harry and Ron, who are accompanied by Neville and Hermione, into a midnight excursion, they accidentally enter a forbidden corridor and find a huge three-headed dog. The group hastily retreats, and Hermione notices that the dog is standing on a trapdoor. Harry concludes that the monster is guarding the package Hagrid retrieved from Gringotts.
After Ron criticises Hermione's ostentatious proficiency in Charms, she hides in the girls' toilet, crying. At the Halloween Feast, Professor Quirrell reports that a troll has entered the dungeons. While everyone returns to their dormitories, Harry and Ron rush to warn Hermione, who was not at the feast to hear the announcement. The troll corners Hermione in the toilet but Harry and Ron clumsily save her. Afterward, Hermione takes the blame for the battle and becomes a firm friend of the two boys.
The evening before Harry's first Quidditch match, he sees Snape receiving medical attention from Filch for a bite on his leg caused by the three-headed dog. During the game, Harry's broomstick goes out of control, endangering his life, and Hermione notices that Snape is staring at Harry and muttering. Concluding that Snape is responsible for Harry's out-of-control broom, she dashes over to the Professors' stand, knocking over Quirrell in her haste and sets fire to Snape's robe. Harry regains control of his broom and catches the Golden Snitch, winning the game for Gryffindor. Hagrid refuses to believe that Snape was responsible for putting Harry in danger, but lets slip that he bought the three-headed dog (named Fluffy) and that the monster is guarding a secret that belongs to Dumbledore and a wizard named Nicolas Flamel.
When Christmas break arrives, Harry and the Weasleys remain at Hogwarts while Hermione goes back home. One of Harry's presents, from an anonymous donor, is an Invisibility Cloak that belonged to his father and also a flute by Hagrid. Harry uses the Cloak to search the library's Restricted Section for information about the mysterious Flamel, and he happens to find a room containing the Mirror of Erised, which shows him his parents and several of their ancestors. Harry becomes addicted to the Mirror's visions, choosing to spend time with his 'family', rather than his friends at Hogwarts, until he is rescued by Professor Dumbledore, who explains that it only shows the viewer what he most desperately longs for.
When the rest of the students return for the next term, Draco plays a prank on Neville, and Harry consoles Neville with a sweet. The collectible card wrapped with the sweet identifies Flamel as an alchemist. Hermione soon discovers that he is 665 years old and possesses the only known Philosopher's Stone, from which an elixir of life can be extracted. A few days later, Harry notices Snape sneaking towards the outskirts of the Forbidden Forest. There he half-hears a secret conversation about the Philosopher's Stone between Snape and Quirrell. Harry concludes that Snape is trying to steal the Stone, and Quirrell has helped prepare a series of defences for it, which was an almost fatal mistake.
The three friends discover that Hagrid is raising a baby dragon in violation of wizarding law and arranges to smuggle it out of the country around midnight. Draco, hoping to get them into trouble, informs Professor McGonagall. Although the dragon is safely sent away, they are caught outside of their dormitory. Harry, Hermione, Draco, and Neville are punished and assigned the task of assisting Hagrid with saving a badly injured unicorn in the Forbidden Forest. They split into two parties and venture off into the Forest where Harry and Draco come across a hooded figure drinking the blood of an injured unicorn. Aware of their presence, the figure approaches the boys, but Harry is rescued by a centaur named Firenze, who offers to give him a ride back to the school. The centaur tells Harry that drinking a unicorn's blood will save the life of a mortally injured individual, but at the price of having a cursed life from that moment on. Firenze suggests that it was Voldemort who drank the unicorn's blood to gain enough strength to make the elixir of life (from the Philosopher's Stone), and regain full health by drinking it.
A few weeks later, Harry learns from Hagrid that the dragon egg was given to him by a hooded stranger who had asked him how to get past Fluffy, which Hagrid had admitted, was easy: music sends it to sleep. Realizing that one of the Philosopher's Stone's defenses is no longer secure, Harry goes to inform Dumbledore, only to find that the headmaster has just left for a meeting in London. Harry concludes that Snape faked the message that called Dumbledore away and will try to steal the Stone that night. Harry decides that they must protect the stone themselves in Dumbledore's absence. Covered by the Invisibility Cloak, the trio enters Fluffy's chamber, where Harry sends the beast to sleep by playing the flute, which was a Christmas present from Hagrid. After lifting the trap-door, they encounter a series of obstacles, each of which requires unique skills possessed by one of the three, and one of which requires Ron to sacrifice himself in a life-sized game of wizard's chess.
Despite their reluctance to leave Ron behind, Harry and Hermione arrive at a room with a series of potions of different sizes and colors. After Hermione figures out the riddle provided, she instructs Harry on which potion to drink. Harry swallows the liquid, allowing him to pass safely through a magical fire and enter the final room while Hermione returns to collect Ron and notify Dumbledore of the night's events.
In the final room, Harry, now alone, finds Quirrell, who admits that he had tried to kill Harry at his Quidditch match against Slytherin. He also admits that he let the troll into Hogwarts. This means that Snape had been trying to protect Harry all along and had not been trying to kill him. Quirrell is one of Voldemort's followers and, after failing to steal the Philosopher's Stone the first time, he allowed his master to possess him so that he could get the stone for himself. This, however, proves a difficult task because the only other object in the room is the Mirror of Erised, which will not reveal to Quirrell where the Stone is. At Voldemort's bidding, Quirrell makes Harry stand in front of the Mirror. The Mirror shows Harry finding the stone. Quirrell removes his turban, revealing the face of Voldemort on the back of his head. Voldemort/Quirrell tries to grab the Stone from Harry but fails to do so. After the long struggle, Harry passes out. He awakes in the school hospital, where Dumbledore explains to him that he survived because his mother sacrificed her life to protect him, and neither Voldemort nor Quirrel could understand the power of love. Voldemort left Quirrell to die and is likely to return by some other means. The Stone has now been destroyed. The school year ends at the final feast, during which Gryffindor wins the House Cup. Harry returns to the Dursleys' for the summer holiday but does not tell them that under-age wizards are forbidden to use magic outside of Hogwarts.
- Harry Potter is an orphan whom Rowling imagined as a "scrawny, black-haired, bespectacled boy who didn't know he was a wizard." She developed the series' story and characters to explain how Harry came to be in this situation and how his life unfolded from there. Apart from the first chapter, the events of this book take place just before and in the year following Harry's eleventh birthday. Voldemort's attack left a lightning bolt-shaped scar on Harry's forehead, which produces stabbing pains when Voldemort feels any strong emotion. Harry has prodigious natural talent for Quidditch and the ability to persuade friends by passionate speeches.
- Ron Weasley is Harry's age and Rowling describes him as the ultimate best friend, "always there when you need him." He is freckled, red-haired and quite tall. He grew up in a fairly large pure-blood family as the sixth born of seven children. Although his family is quite poor, they still live very comfortably and happy. His loyalty and bravery in the face of a game of Wizards Chess plays a vital part in finding the Philosopher's Stone.
- Hermione Granger, the daughter of an all-Muggle family, is a bossy girl who has apparently memorised most of the textbooks before the start of term. Rowling described Hermione as a "very logical, upright and good" character with "a lot of insecurity and a great fear of failure beneath her swottiness". Despite her nagging efforts to keep Harry and Ron out of trouble, she becomes a close friend of the two boys after they save her from a troll, and her magical and analytical skills play an important role in finding the Philosopher's Stone. She has bushy brown hair and rather large front teeth.
- Neville Longbottom is a plump, diffident boy, so forgetful that his grandmother gives him a Remembrall, although he cannot remember why. Neville's magical abilities are weak and appeared just in time to save his life when he was eight. Despite his timidity, Neville will fight anyone after some encouragement or if he thinks it is right and important.
- Rubeus Hagrid, a half-giant nearly 12 feet (3.7 m) tall, with tangled black hair and beard, was expelled from Hogwarts and his wand was broken, but Professor Dumbledore let him stay on as the school's gamekeeper, a job which enables him to lavish affection and pet names on even the most dangerous of magical creatures. Hagrid is fiercely loyal to Dumbledore and quickly becomes a close friend of Harry, Ron and, later, Hermione, but his carelessness makes him unreliable.
- Professor Dumbledore, a tall, thin man who wears half-moon spectacles and has silver hair and a beard that tucks into his belt, is the headmaster of Hogwarts, and thought to be the only wizard Voldemort fears. Dumbledore, while renowned for his achievements in magic, finds it difficult to resist sweets and has a whimsical sense of humour. Although he shrugs off praise, he is aware of his own brilliance. Rowling described him as the "epitome of goodness".
- Professor McGonagall, a tall, severe-looking woman with black hair tied in a tight bun, teaches Transfiguration, and sometimes transforms herself into a cat. She is Deputy Headmistress, and Head of Gryffindor House and, according to the author, "under that gruff exterior" is "a bit of an old softy".
- Petunia Dursley, the sister of Harry's mother Lily, is a thin woman with a long neck that she uses for spying on the neighbours. She regards her magical sister as a freak and tries to pretend that she never existed. Her husband Vernon is a heavily built man whose irascible bluster covers a narrow mind and a fear of anything unusual. Their son Dudley is an overweight, spoiled bully.
- Draco Malfoy is a slim, pale boy who speaks in a bored drawl. He is arrogant about his skill in Quidditch, and despises anyone who is not a pure-blood wizard – and wizards who do not share his views. His parents had supported Voldemort, but changed sides after the dark wizard's disappearance, claiming they had been bewitched. Draco avoids direct confrontations, and tries to get Harry and his friends into trouble.
- Professor Quirrell is a twitching, stammering man who teaches Defence Against the Dark Arts. Reputedly he was a brilliant scholar, but his nerve was shattered by an encounter with vampires. Quirrell wears a turban to conceal the fact that he is voluntarily possessed by Voldemort, whose face appears on the back of Quirrell's head.
- Professor Snape, who has a hooked nose, sallow complexion and greasy black hair, teaches Potions, but would prefer to teach Defence Against the Dark Arts. Snape praises pupils in Slytherin, his own House but seizes every opportunity to humiliate others, especially Harry. Several incidents, beginning with the shooting pain in Harry's scar during the start-of-term feast, lead Harry and his friends to think Snape is a follower of Voldemort.
- Filch, the school caretaker who knows the school's secret passages better than anyone else except, possibly, the Weasley twins. His cat, Mrs. Norris, aids his constant hunt for misbehaving pupils.
Other members of staff include the dumpy Herbology teacher and Head of Hufflepuff House Professor Sprout, Professor Flitwick, the tiny and excitable Charms teacher, and Head of Ravenclaw House, the soporific History of Magic teacher, Professor Binns, a ghost who does not seem to have noticed his own death; and Madam Hooch, the Quidditch coach, who is strict, but a considerate and methodical teacher. The poltergeist Peeves wanders around the castle causing trouble wherever he can.
In the book, Rowling introduces an eclectic cast of characters. The first character to be introduced is Vernon Dursley, Harry's uncle. Most of the actions centre on the eponymous hero Harry Potter, an orphan who escapes his miserable childhood with the Dursley family. Rowling imagined him as a "scrawny, black-haired, bespectacled boy who didn't know he was a wizard", and says she transferred part of her pain about losing her mother to him. During the book, Harry makes two close friends, Ronald Weasley and Hermione Granger. Ron is described by Rowling as the ultimate best friend, "always there when you need him". Rowling has described Hermione as a "very logical, upright and good" character with "a lot of insecurity and a great fear of failure beneath her swottiness".
Rowling also imagined a supporting cast of adults. The headmaster of Hogwarts is the powerful, but kind wizard Albus Dumbledore, who becomes Harry's confidant; Rowling described him as "epitome of goodness". His right hand is severe Minerva McGonagall, who according to the author "under that gruff exterior" is "a bit of an old softy", the friendly half-giant Rubeus Hagrid, who saved Harry from the Dursley family and the sinister Severus Snape. Professor Quirrell is also featured in the novel.
The main antagonists are Draco Malfoy, an elitist, bullying classmate and Lord Voldemort, the most powerful evil wizard who becomes disembodied when he tries to kill baby Harry. According to a 1999 interview with Rowling, the character of Voldemort was created as a literary foil for Harry, and his backstory was intentionally not fleshed-out at first:
The basic idea... Harry, I saw Harry very very very clearly. Very vividly. And I knew he didn't know he was a wizard. [...] And so then I kind of worked backwards from that position to find out how that could be, that he wouldn't know what he was. [...] When he was one year old, the most evil wizard for hundreds and hundreds of years attempted to kill him. He killed Harry's parents, and then he tried to kill Harry—he tried to curse him. [...] And—so—but for some mysterious reason, the curse didn't work on Harry. So he's left with this lightning bolt shaped scar on his forehead and the curse rebounded upon the evil wizard, who has been in hiding ever since.