This book follows a 9-year-old boy named Bruno growing up during World War II in Berlin, Germany. He lives in a huge house with his parents, his 12-year-old sister Gretel and servants, one of whom is called Maria. After a visit by Adolf Hitler and Eva Braun, Bruno's father is promoted to Commandant, and the family has to move to "Out-With" because of the orders of "The Fury"(Bruno's naïve interpretation of the word 'Führer'). Bruno is initially upset about moving to "Out-With" (never identified, but cf. Auschwitz) and leaving his 'three best friends for life', Daniel, Karl, and Martin. His mother, who is against the move herself, says that they "[do not] have the luxury of thinking". From the house in Out-With, Bruno sees a camp enclosed by wire fences but does not understand what it is. Bruno is very bored in his new house, with no friends to play with and nothing in the house to explore. One day, despite being warned not to, Bruno decides to explore the strange wire fence. As he walks along the fence, he meets a Jewish boy named Shmuel, whom he learns shares his birthday. Shmuel says that his father, grandfather, and brother are with him on this side of the fence, but he is separated from his mother. Bruno and Shmuel talk and become very good friends, although Bruno still does not understand very much about Shmuel and his side of the fence. As the meetings go on, Bruno's naïvete shows that his innocence has been preserved despite being near a death camp. Shmuel shares some of his knowledge of the suffering in the camp but still does not fully explain why he is there.
When lice eggs are discovered in Bruno's hair he is forced to get all of his hair shaved off. Bruno comments that he looks like Shmuel, and Shmuel agrees, except that Bruno is fatter. Bruno's mother eventually persuades his father to take them back to Berlin and stay at Out-With without them. Bruno hears that Shmuel's father has also gone on a march and plans to help find him before the trip to Germany.
The next day Bruno concocts a plan with Shmuel to sneak into the camp to look for Shmuel's father. Shmuel brings a set of prison clothes, and Bruno leaves his own clothes outside the fence. As they search the camp, both children are rounded up along with a group of prisoners to be sent to the gas chamber. Bruno apologizes to Shmuel that they didn't successfully find his father, which Shmuel does not have a chance to reply to before the gas is turned on, and Shmuel and Bruno both die holding hands.
The book concludes with the family's search for the missing Bruno, the finding of his clothes beside a weak point in the camp fence, and his father's working out what had happened. Bruno's father is heartbroken, and glad when he is moved away from the camp.