The story is narrated from the perspective of an unnamed seven-year-old English boy, who goes to live with his Norwegian grandmother after his parents are killed in a car accident. The boy loves all his grandmother's stories, but he is especially enthralled by the stories about real-life witches who she says are horrific female demons who seek to kill human children. She tells him a real witch looks exactly like an ordinary woman, but there are ways of telling whether she is a witch, such as real witches have claws instead of fingernails, which they hide by wearing gloves; are bald, which they hide by wearing wigs that make them break out in rashes; have square-ended feet with no toes which they hide by wearing small, pointy shoes that cause them discomfort; have eyes with pupils that change colour; have blue spit which they use for ink and have large nostrils which they use to sniff out children, who, to a witch, smell of dog's droppings; the dirtier the child, the less likely a witch can smell them.
As specified in the parents' will, the narrator and his grandmother return to England, where he had been born and had attended school, and where the house he is inheriting is located. The grandmother warns the boy to be on his guard, since English witches are known to be among the most vicious in the world, notorious for turning children into loathsome creatures so unsuspecting adults will kill them.
The grandmother reveals witches in different countries have different customs and that, while the witches in each country have close affiliations with one another, they are not allowed to communicate with witches from other countries. She also tells him about the mysterious Grand High Witch of All the World, the feared and diabolical leader of all of the world's witches, who visits their councils in every country, each year.
"Children are rrree-volting! Vee vill vipe them all avay! Vee vill scrrrub them off the face of the earth! Vee vill flush them down the drain!"
—The Grand High Witch at the secret witches convention.[2]
Shortly after arriving back in England, while the boy is working on the roof of his treehouse, he sees a strange woman in black staring up at him with an eerie smile and quickly realises that she is a witch. Later, while the boy is training his pet mice given to him as a consolation present by his grandmother, the hotel ballroom hosts the "Royal Society for the Prevention of Cruelty to Children." The boy then sneaks into the ballroom to play with his pet mice. After seeing ladies entering the ballroom, he hides behind a screen. When they reach underneath their hair to scratch at their scalp with a gloved hand, the boy realises that this is the yearly gathering of the English witches, and that he is trapped in the now-closed room. A young woman goes on stage and removes her entire face, which is a mask. The boy realises that she is none other than the Grand High Witch herself. She expresses her displeasure at the English witches' failure to eliminate enough children. The Grand High Witch unveils her master plan: all of England's witches are to purchase sweet shops (with counterfeited money printed by her from a magical money-making machine) and give away free sweets and chocolates laced with a drop of her latest creation: "Formula 86 Delayed-Action Mouse-Maker," a magic potion which turns the consumer into a mouse at a specified time set by the potion-maker. The intent is for the children's teachers and parents to unwittingly kill the transformed children.
To demonstrate the formula's effectiveness, the Grand High Witch brings in a child named Bruno Jenkins, a rich and often greedy boy lured to the convention hall with the promise of free chocolate. She reveals that she had tricked Bruno Jenkins into eating a chocolate bar laced with the formula the day before, and had set the "alarm" to go off during the meeting. The potion takes effect, transforming Bruno into a mouse before the assembled witches. Shortly after, the witches detect the narrator's presence and corner him. The Grand High Witch then pours an entire bottle of Formula 86 down his throat, and the overdose instantly turns him into a mouse. However, the transformed child retains his mentality, personality and even his voice - refusing to be lured into a mouse-trap. After tracking down Bruno, the transformed boy returns to his grandmother's hotel room and tells her what he has learned. He suggests turning the tables on the witches by slipping the potion into their evening meal. With some difficulty, he manages to get his hands on a bottle of the potion from the Grand High Witch's room.
After an attempt to return Bruno to his parents fails spectacularly (mainly due to his mother's fear of mice), the grandmother takes Bruno and the narrator to the dining hall. The narrator enters the kitchen, where he pours the potion into the green pea soup intended for the witches' dinner. On the way back from the kitchen, a cook spots the narrator and chops off part of his tail with a carving knife, before he manages to escape back to his grandmother. The witches all turn into mice within a few minutes, having had massive overdoses just like the narrator. The hotel staff and the guests all panic and unknowingly end up killing the Grand High Witch and all of England's witches.
Having returned home, the boy and his grandmother devise a plan to rid the world of witches. Impersonating the chief of police of Norway on the telephone, she discovers that the Grand High Witch was living in a castle there. They will travel to the Grand High Witch's Norwegian castle, and use the potion to change her successor and assistants into mice, then release cats to destroy them. Using the Grand High Witch's money-making machine and information on witches in various countries, they will try to eradicate them everywhere. The grandmother reveals that, as a mouse, the boy will probably only live for about another nine years, but the boy does not mind, as he does not want to outlive his grandmother (she reveals that she is also likely to live for only nine more years), as he would hate to have anyone else look after him.
