The unnamed protagonist, known only as the boy, moves in with his grandmother after he is left an orphan. The relationship between the boy and the grandmother is good as they love each other very much. She tells him many stories about witches, specifically how to recognize them so he will be safe from them. Aside from a few physical characteristics (they are bald, clawed hands, no toes), witches are awful creatures that look like human women and prey on children.
The grandmother warns him about the Grand High Witch, the most evil and most feared leader of all the witches. When the grandmother and the boy go on a holiday to a fancy hotel on the English coast, the boy encounters a group of witches gathering for their yearly meeting. He overhears the grand witch introducing her new invention, something she calls Formula 86, a potion to turn children into mice. The witch explains her plan of putting the potion in candy and having the witches all open sweet shops. As part of her presentation, the Grand High Witch lures a boy named Bruno Jenkins who is a guest in the hotel and turns him into a mouse. After discovering the boy, the witches turn the boy into a mouse as well.
The boy finds Bruno and realizes that both of them still regain their personalities, voices and intelligence despite being transformed. The boy comes up with a plan to turn all the witches into mice. All the witches are instantly transformed and are all killed by the hotel staff and guests.
After returning home, the boy and the grandmother come up with a plan to use the potion to eradicate all of the witches in the world.