August "Auggie" Pullman is a 10-year-old boy living in Manhattan. He has been home schooled by his mother due to a rare medical facial deformity, which he refers to as "mandibulofacial dysostosis", more commonly known as Treacher Collins syndrome and a cleft palate that he was born with. His parents decide to enroll him in Beecher Prep, a private school, for the start of middle school in the fall.
Auggie visits Beecher with his parents where he meets the school director Mr. Tushman and three students: Jack Will, Julian Albans, and Charlotte Cody. Although extremely self-conscious and scared of being around kids his own age, he gradually gets used to and even begins to enjoy school. He befriends Jack as well as a girl named Summer Dawson, who sits with him during lunch when no one else will. Julian, however, barely conceals his disgust at Auggie's appearance, avoids him and often makes hurtful remarks.
When Auggie's homeroom hosts a Halloween party, Auggie plans to wear a Star Wars-themed costume. Auggie likes Halloween because "then we could walk around and get to know each other before we got to see what we looked like under the masks." When his planned costume didn't work out, Auggie wore a "Bleeding Scream" costume instead. Unrecognized at school, he overhears Jack telling Julian he would "kill himself" if he looked like Auggie. Feeling hurt and betrayed, Auggie wants to quit school, but his sister Via convinces him not to. Auggie confides the incident to Summer. Jack notices that Auggie has become quiet and distant; he asks Summer why, and though she won't divulge the secret, she says "Bleeding Scream" as a hint. Jack realizes Auggie overheard him and sincerely apologizes, saying he didn't mean it, and they become friends again.
Throughout the rest of the school year, Auggie faces many obstacles, mostly due to ringleader Julian encouraging his "gang" to avoid and isolate Auggie (and Jack). However, things begin to change during a class overnight camping trip when Auggie and Jack are attacked by older students from another school. Not only does Jack defend Auggie, but several other classmates (formerly part of Julian's crowd) come to his defense and befriend him.
At the graduation ceremony, Auggie is awarded the "Henry Ward Beecher medal" which "honors students who have been notable or exemplary in certain areas throughout the school year." He gets a standing ovation, takes pictures with everyone (something he had always refused to do) and goes back to his house for a party to celebrate. The book ends with his mother whispering in his ear, "You really are a wonder, Auggie."