- Haroun: The main character/central consciousness of the story. A young, curious, courageous, outspoken child. He struggles throughout most of the story with a form of attention-deficit disorder caused by his mother running away with Mr. Sengupta at exactly eleven o'clock, and under its influence, he is unable to concentrate for a longer period of time. But he eventually overcomes his disorder at the climax, never to suffer from it again. He and his father are both named after the "legendary Caliph of Baghdad, Haroun al-Rashid, who features in many Arabian Nights tales. Their surname Khalifa actually means Caliph."[5]
- Rashid: Haroun's father, known as the Shah of Blah and the Ocean of Notions for his ability to devise stories impromptu, Rashid is a professional storyteller sometimes hired by corrupt politicians to persuade constituents in their favor. His attachment to his wife and to his practice of storytelling is probably his greatest psychological weaknesses; when either of them is lost, he becomes depressed and tends to lose the other. In the story, to recover the latter, he travels to Kahani by means known as "Rapture," through which he is able to travel inside his dreams and wake up in the world, his dream has created.
- Soraya: Haroun's mother and Rashid's wife, who is tired of his imagination and leaves him for the dull and dreary Mr. Sengupta. In the end, she returns to Rashid and revives her affection for her husband and son. Upon her return, the depression overwhelming Rashid and the syndrome manifested by Haroun do not reappear.
- Mr. Sengupta: Haroun's neighbour, who elopes with Soraya. As a rule, Mr. Sengupta despises imagination and stories, which sets the stage for his later appearance on Kahani as antagonist Khattam-Shud. Khattam-Shud's. His name is a legitimate Bengali surname.
- Miss Oneeta: Mr. Sengupta's obese, talkative, self-important, overwhelmingly emotional, generous wife, disappointed in her husband after he has eloped with Soraya. In her dismay, she disowns him and her married name. It is she who reveals that Soraya has deserted her family and that her act has given Haroun his disorder, and also announces her return.
- Mr. Butt: The mail courier, a reckless driver who, when requested to provide transport for Haroun and Rashid (who is expected to speak at an election of public officers), ignores all other demands to take them to their destination before dusk.
- Snooty Buttoo: A corrupt politician who hires Rashid to convince constituents that he (Buttoo) should be re-elected. Buttoo is a class-conscious, pompous, arrogant, self-assured person whose chief hold over his constituents is that he has been re-elected before. To persuade Rashid to sympathize with him, he offers both Rashid and Haroun a stay on a luxurious houseboat called "The Arabian Nights Plus One." He is ultimately driven from his district by popular demand.
- Butt the Hoopoe: A mechanical Hoopoe who becomes Haroun's steed in Kahani, capable of almost all known mental feats, including telepathy (the latter producing a recurrent joke that he "spoke without moving [his] beak"). He is also capable of flying at impossible speeds, between Earth and Kahani.
- Iff: A "water genie" from Kahani who accompanies Haroun in Kahani. Iff's task is to control Rashid's imagination, in the form of waters transmitted to Rashid via an invisible faucet. Iff himself is a benevolent character having a blue moustache and beard; an effusive, somewhat cantankerous personality; and a habit of speaking in lists of synonyms.
- Prince Bolo:[6] A possible parody of the archetypal awe-inspiring hero or Prince Charming, Bolo is a reckless, slightly stupid, melodramatic figure, nominally the leader of the charge to rescue Princess Batcheat from Chup, but holding little authority; prone to becoming excited at the least provocation; and obsessed with rescuing Batcheat, so that all other things appear to him of little significance.
- Princess Batcheat: A damsel in distress. Batcheat is the daughter of King Chattergy, ruler of Gup, and the fiancée of Prince Bolo. She is somewhat foolish; sentimental; reckless; and completely infatuated with Bolo, who is the only person to think her beautiful. Her name is pronounced "Baat-cheat,"[7] which is translated as "conversation." When Princess Batcheat is captured by Chupwalas during an excursion to the border between Gup and Chup,[8] they plot to sew her mouth shut and rename her Khamosh, meaning "silent," but they never carry this out.
- General Kitab: Literally "General Book," General Kitab is the commander of the Guppee Army, called the "Library." It consists of a multitude of Pages. The General participates in every debate regarding the worth of the cause on which the army has embarked, and frequently forms such debates on purpose to resolve all conflict of interest or opinion. The whole army, therefore, takes part in every campaign of Rogerian argument, whose sole aim is to produce conciliation and eventual unity among the Pages. Because Guppee laws permit unlimited freedom of speech, these debates are unrestrained to an extent that would (as Haroun remarks) be considered insubordination in the reader's world.
- King Chattergy: Princess Batcheat's father and Prince Bolo's father-in-law, who forms the nominal head of Gup's government but has little real power. He is given very little role in most of the story.
- Blabbermouth: A female Page of the Library of Gup. Blabbermouth is a talkative, ill-tempered, stubborn, unscrupulous, quarrelsome and courageous girl who despises Princess Batcheat, disguises herself as a boy (due to lack of equal rights for girls), and is skilled at the art of juggling. Blabbermouth joins the army of Gup to march on Chup. She saves many lives by impeding a bomb attack attempted by Khattam-Shud's ambassador. Thereupon she is exposed as a girl and expelled from the army by Bolo. She then becomes an aide to Mudra, an ally of the Guppees, with whom she is implied to be infatuated.
- Mudra: Second-in-command to Khattam-Shud, who becomes disgruntled with his master's policies and defects to the Guppee side. His shadow, like the shadows of each and every person in Chup, can behave independently of himself and is, therefore, his sidekick. Mudra himself is an able warrior skilled in the art of hand-to-hand combat. Mudra is nearly mute, being able only to communicate his own name and that he "speaks" by Abhinaya, the sign language used in classical Indian dance. His own name is said in the appendix to be the generic term for all signs used in this language. After the climax, Mudra becomes President of Chup.
- Khattam-Shud: The villain of the story, whose name means "completely finished." As a character, he is the "Prince of Silence and the Foe of Speech" feared by most Guppees. He is the ruthless ruler of Chup and in some sense the Kahanian counterpart of Mr. Sengupta. Khattam-Shud is the founder of a religion whose supreme commandment is abstinence from speech. In Chup City, schools, law-courts, and theaters had to close. Khattam-Shud tries to poison the Sea so that all stories go wrong and come to a bad end.
- The Eggheads: Here, the technicians of Kahani: white-coated, completely bald, enthusiastic, cheerful, and intelligent. The Eggheads of Gup City are said to be the inventors of all "Processes Too Complicated To Explain," by which impossible feats such as Kahani's bizarre orbit, the creation of artificial happy endings for stories, and the transmission of "story water" to Earthly storytellers are easily accomplished. They are in awe of their superintendent, the Walrus, for his possession of a moustache.
- Walrus: The superintendent of the Eggheads, distinguished from them by his possession of a small moustache that gives him his name.
- Plentimaw Fish: Angelfish the size of giant sharks. The name is derived from their multiplicity of mouths, through which they constantly ingest the stories conveyed by the waters. Inside their bodies, the stories combine to form new stories.
- Mali: A "Floating Gardener" composed of interwoven flowering vines and water plants that behave as a single organism. He is one of many, whose task is to prevent stories from becoming irretrievably convoluted and to cut away weeds on the Ocean's surface. Floating Gardeners are divided into a hierarchy of classes, of which Mali belongs to the First Class, presumably the highest. Mali, and presumably other Floating Gardeners, is virtually invulnerable, being able to withstand any and all attacks made against him by the Chupwalas.
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