As a child, Jacob Magellan Portman has been fascinated with his grandfather Abraham's stories about surviving as a Jew during World War II, running from man-eating monsters, and living with peculiar children in a secret home guarded by "a wise old bird." As Jacob grows older, he begins to doubt the stories until the arrival of his grandfather's death. Blood-strewn, exhausted, and lying in his back garden on the outskirts of Florida Woods, Abraham's last words are a mystery: "...find the bird in the loop on the other side of the old man's grave on September 3, 1940, and tell them what happened." As his grandfather dies, Jacob catches sight of a horrific monster just like the ones described in Abraham's stories. Soon, he starts experiencing trauma and being plagued with nightmares relating to those monsters. Believing their son to be going crazy, Jacob's parents take him to Dr. Golan, a psychiatrist, who suggests that Jacob go to Cairnholm, Wales, the location of his grandfather's children's home to confront the place of his trauma. On his own, Jacob locates and explores the old house only to find it empty and everything caked in dust. According to the local people, the place is haunted and a bomb had killed all its inhabitants many years ago, on September 3, 1940.
Sensing a connection, Jacob refuses to give up and returns to the house one more time, where he encounters a mysterious girl who can conjure fire with her hands whom he follows, trying to question her after hearing her call out his grandfather's name. They reach the bogs surrounding the house before Jacob realizes that the people of Cairnholm are different, including the patrons at the inn and his father isn't there. Luckily, a confused Jacob is rescued by the girl from before and an invisible boy, who introduce themselves as Emma Bloom and Millard Nullings respectively. A suspicious Emma holds him captive and brings him to the children's home, where he finds it magically transformed to the paradise of his grandfather's stories, complete with the peculiar children and the "wise old bird", who is, in fact, the headmistress Miss Alma LeFay Peregrine (named after the peregrine falcon, a well known bird of prey).
There Jacob is also introduced to other peculiar children apart from Emma and Millard: Bronwyn Bruntley, a girl with incredible strength, Claire Densmore, a little girl with an extra mouth at the back of her head, Olive Abroholos Elephanta, a little girl who is lighter than air, Enoch O'Connor, a boy who can animate non-living things for a short amount of time by transplanting organs, Hugh Apiston, a boy with bees living in his stomach, Fiona Frauenfeld, a girl with an affinity for growing plants, and Horace Somnusson, a boy with prophetic dreams. Jacob is shocked and befuddled by the state of the place, so Olive and Millard explain that they are currently existing in a time loop, a place where time is constantly reversed and where they all relive the same day every day, September 3, 1940. This is all thanks to Miss Peregrine, a special type of peculiar being known as an ymbryne, one who can shapeshift into birds (namely a peregrine falcon after which she is named) and manipulate time. Apart from keeping them alive (if not the bomb would have killed them), this time loop also protects the peculiar children from being hunted by hollowgast —humanoid, tentacle-mouthed creatures that devour peculiars. The hollowgast were formed from a cataclysmic explosion that occurred after an experiment in the Siberian tundra went awry. Hollows who have consumed enough peculiars become wights, beings who resemble humans in every aspect save their eyes, which have no pupils. The ultimate goal of the wights is to gain power from the peculiars, as well as morph every one of their fellow hollowgast into wights that will rule the world.
Soon, Miss Peregrine's former mentor Miss Avocet arrives at the loop mad with grief over the kidnapping of her wards to wights, who have executed their plan of raiding loops. Fearing for the children's safety, Jacob is tasked with the job of reporting any suspicious information going on in the outside world. With his comings and goings, Jacob and Emma begin to develop feelings for each other, as well as get a glimpse into his own peculiar self: he can see the hollows while other peculiars can't, just like his grandfather. Miss Peregrine's fears are confirmed when eyeless sheep bodies begin to pile up, and Martin, a worker in the Cairnholm Local Museum, is killed. Going against Miss Peregrine's orders to not leave the house, Enoch, Bronwyn, Emma, Jacob and Millard escape, and Enoch uses a sheep heart to briefly bring Martin back to life. Martin manages to inform the group of the presence of a wight on the island, but by then it is too late as one appears right behind them along with a hollow companion. To Jacob's shock, he reveals himself to be Dr. Golan, as well as Jacob's family's hired lawn gardener, and Jacob's middle school bus driver. Jacob refuses Golan's offer to join him in finding peculiars, and decides to stay with his friends. Golan sends his hollow after the group, and Emma and Jacob split up from the rest. After a brief scuffle, Jacob kills it with a pair of sheep shears. They make their way back to the orphanage, but discover that Golan has kidnapped Miss Peregrine and Miss Avocet and locked the rest of the children in the house.
Dr. Golan warns them not to attempt to rescue Miss Peregrine and leaves the loop, but Millard manages to sneak out invisibly and follow him. Jacob and his friends follow Millard's tracks and find Golan near a lighthouse trying to catch a boat with his other wight comrades. During the process of saving Miss Peregrine, who is trapped in her bird form, Millard is wounded from a gunshot, but Golan is ultimately killed by Jacob. Just then, the other wights arrive and even though they are able to rescue Miss Peregrine, Miss Avocet is taken away. Returning to the orphanage, they find it destroyed, leaving them having to track down the wights and discover how to help Miss Peregrine. It is then Jacob decides to follow his friends and returns to the present to say goodbye to his father, but promises to return when his mission is finished. Guided by only a prophetic dream from Horace, they set sail to find help.
