In 1868, 19-year-old Alice Kingsleigh, having mourned the recent loss of her father, is troubled by strange recurring dreams and the stifling expectations of the society in which she lives. After receiving an unwanted marriage proposal from Hamish Ascot at his father's garden party, Alice spots a familiar white rabbit wearing a waistcoat and carrying a pocket watch. She follows it to a rabbit hole and accidentally falls in. She shrinks after drinking from a bottle labeled 'Drink Me' (called a Pishsalver), meaning she cannot reach a key on a table, and then eats a cake labeled 'Eat Me' (called an Upelkuchen), transforming into a giantess. After drinking from the bottle again to fit through a tiny door, she enters the forest of a fantastical place called Underland. There, she is greeted by the White Rabbit, a Dormouse, a Dodo, Talking Flowers, and identical twins Tweedledum and Tweedledee, who all apparently know her.
Alice asserts that she is dreaming, but learns from Absolem the Caterpillar that she is destined to slay the Jabberwocky and end the tyranny of the Red Queen. The group is ambushed by the ravenous Bandersnatch and the Red Queen's knights, led by the Knave of Hearts. All are captured except Alice, who escapes, and the Dormouse, who takes one of the Bandersnatch's eyes. The Knave informs the Red Queen of Alice's return, and is ordered to find her immediately.
The Cheshire Cat guides Alice to the Mad Hatter, March Hare, and Dormouse's tea party. The Red Knights and the Knave of Hearts disrupt the party, but Alice manages to hide in a teapot. The Hatter then takes her to a safe place. The Hatter explains that the Red Queen took over Underland, usurping her sister the White Queen. While in the woods, the Red Knights find the two, but the Hatter gives himself up so that Alice can escape. She is found by the Knave's Bloodhound, named Bayard, who is allied with the resistance. He takes Alice to the Red Queen's castle, where she accidentally outgrows her clothes after eating another Upelkuchen.
Infiltrating the palace as a courtier named "Um", Alice learns that the vorpal sword, the only weapon capable of killing the Jabberwocky, is locked inside the Bandersnatch's den. The knave makes advances to Alice, which she rebuffs, but the jealous Red Queen orders her beheading. Alice obtains the sword and returns the Bandersnatch's eye. He gratefully helps her escape the castle and delivers her to the White Queen, who gives Alice a potion that returns her normal size. The Cheshire Cat uses his shapeshifting powers to free the Mad Hatter, who incites rebellion amongst the Red Queen's subjects. Meanwhile, Absolem, who is turning into a pupa, finally gets Alice to remember that she visited Underland when she was a little girl, and called it "Wonderland". Just before his chrysalis closes, he advises her to fight the Jabberwocky, save Underland, and stop the Red Queen for good.
The Queens gather their armies on a chessboard-like battlefield and send Alice and the Jabberwocky to decide the battle in single combat. Alice beheads the Jabberwocky with the vorpal sword, and the red knights gratefully turn against their ruler. The White Queen banishes her sister and the Knave into exile together, then gives Alice a vial of the Jabberwocky's purple blood, which can fulfill one wish. Alice says farewell to her friends, then wishes to return home.
Alice awakens and escapes the rabbit hole, dirty and scratched from her fall. When she returns to the gazebo at the garden party, she refuses Hamish's proposal and impresses Lord Ascot with her idea of establishing trade routes to Hong Kong, inspiring him to take her on as his apprentice. As Alice prepares to set off on a trading ship, Absolem, in his new butterfly form, lands on her shoulder.
