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Bruno is a 9 year old boy growing up during World War II in Berlin, Germany. He lives in a huge house with his loving parents, his twelve-year-old sister Gretel (whom he refers to as a Hopeless Case), and maidservants. His father is a high-ranking SS officer who, after a visit from Adolf Hitler (referred to in the novel as "The Fury", Bruno's misrecognition of the word "Führer") and Eva Braun, is promoted to Commandant, and to Bruno's dismay, the family has to move away to a place called "Out-With" (in reality the Auschwitz Concentration Camp)
Bruno finds out he is not allowed to explore the back of the house or its surroundings. Out of boredom and curiosity, he decides to explore anyway. Whilst poking about he spots a boy on the other side of the fence. Excited that there might be a boy his age, Bruno introduces himself and finds out the Jewish boy's name is Shmuel. Shmuel and his family were brought here, separated from each other and forced to work. Almost every day, the two boys meet at the same spot. Soon, due to their remarkable similarities they become best friends. Despite their differences of circumstance, they are able to understand one another on a deeper level. This empathy fundamentally calls into question the difference between an 'undesirable' Polish Jew and a German. Over the course of the book, Bruno shows a great deal of naïvete, whilst Shmuel seems to have more knowledge, as he has had first-hand exposure to the suffering in the death camp.
Bruno's mother persuades his father to take them back to Berlin, with Bruno's father staying at Auschwitz as the commandant. Though Bruno is about to go back to Berlin with his mother and sister, as a final adventure, he agrees to dress in a set of striped pyjamas and cap to go under the fence to help Shmuel. The boys are going to try and locate Shmuel's father, who went missing in the camp. The boys search together but are unable to locate him. During their search they become mixed up in a group of people going on a march. Neither boy knows where this march will lead. However, they are soon crowded into a gas chamber, which Bruno assumes is a place to keep them dry from the rain. The story from Bruno's perspective ends with Bruno grasping Shmuel's hand. He is not afraid, and has no intention of letting go of his friend.
In the epilogue, the book states that Bruno's family spent many weeks at their home trying to find Bruno before his mother and Gretel return to Berlin to see if he had gone on ahead. They discover that he is not there. A day afterwards, his father returns to the spot where soldiers found Bruno's clothes. This spot is almost exactly where Bruno spent the last year of his life meeting with Shmuel. After a brief inspection, Bruno's father discovers that the fence is not properly attached at the base and can be pulled aside enough for a boy of Bruno's size to fit through. Using this information, his father eventually pieces together that Bruno went into the camp and was killed in the gas chambers. His son's death makes the commandant greatly depressed, and he stops caring about his job. His grief eventually makes him irritable and negligent, and he becomes heavily disliked by his junior officers. Several months later, the Red Army arrives to liberate the camp and orders Bruno's father to go with them. He goes without complaint, still mourning the loss of his child.