When friends Eustace Scrubb and Jill Pole stumble into Aslan's Country when trying to escape bullies at their school, Jill is given a quest by Aslan the Talking Lion. They must save Prince Rilian, son of King Caspian, from the Evil Green Lady. Rilian disappeared 10 years earlier after weeks of searching the woods near Cair Paravel for the serpent who had killed his royal mother, the Queen. However, their task is complicated by the fact that they both got separated on their arrival into Aslan's Country, when Eustace fell from a cliff and was blown to Narnia by Aslan, who soon blows Jill in the same direction. A great ship has just set sail from Cair Paravel, and a talking Owl (Glimfeather) appears and informs Eustace and Jill that the King of Narnia has just departed on his ship. Eustace is horrified to realise that the elderly man boarding the ship was indeed Caspian, who is now decades rather than years older than Eustace himself - as 50 years have passed in Narnia while less than a year has passed on Earth. Caspian, now an elderly man, has just set sail to revisit the places of his youth (where he had voyaged with Edmund, Lucy and Eustace, 50 years earlier), but many believe that he had set out to seek Aslan to find out who should be the next King of Narnia, as he has no other children and fears he will never see Rilian again. They meet the very elderly dwarf Trumpkin, now Lord Regent of Narnia, who has taken over the rule of Narnia while Caspian is at sea. He admits Eustace and Jill to Cair Paravel, and that evening Glimfeather returns to the castle to take Jill to the Parliament of Owls.
That night, they leave the castle with Glimfeather the owl and another owl, who take them to the Parliament of Owls for the full story on Prince Rillian. Glimfeather's friend (whose name is not mentioned) tells them that the Queen of Narnia had been killed by a vile serpent in the Narnian woods a few years earlier, and her son Rillian had gone back to the forest several times in hope of destroying the serpent, only to find no sign of it at any time. After a while, Lord Drinian (another of the King's lifelong friends) confronts Rillian and orders him to stop trying to find the serpent, as it is too dangerous. Rillian then told Drinian to come with him to a part of the forest, where a beautiful lady appears. Drinian's horse suddenly makes a noise, and frightens the lady away. The next time Rillian went out, he failed to return. Drinian later spoke to Caspian about his and Rillian's visit to the forest, and urged the king to "slay him speedily" as a traitor, but the king could not go through with it - he had lost his queen and his son, and it would be too much for him to lose his friend as well.
Puddleglum emerges from behind a rock and tells the children to move on. They continue their journey through the isolated northern parts of Narnia and after some distance they meet a lady on a horse, riding on horseback alongside a knight in black armour (who does not speak a word). The lady introduces herself as the Lady of the Green Kirtle, and tells them to pay a visit to the Giants of Harfang (beyond the Ruined City of the Giants) where there will soon be an Autumn Feast. As they pass through the Ruined City of the Giants, Jill falls down a hole which she identifies as a passage, only to find that it leads nowhere. They then continue their journey to the castle, where the King and Queen giants let them stay. That night, Jill has a nightmare in which Aslan appears and demands that she tell him the signs that she has uncovered in her quest to find Prince Rillian - but she has missed all of them.
The next morning, Eustace, Jill and Puddleglum look out of a window of the castle and see the words UNDER ME inscribed in a nearby hillside. Jill realised that she fell into the E of the message, and that Prince Rillian must be somewhere under that inscription. They later explore the castle, and enter the kitchens. Jill reads a recipe book to find that Man is on the menu for the Autumn Feast, and Puddleglum then reads that Marshwiggle is also on the menu! They escape immediately, only to be spotted in the distance by some of the giants, who release their hounds in pursuit. Eustace, Jill and Puddleglum escape the hounds by crawling through a hole under a rock, only for them to fall a distance down a slope moments later. They suddenly hear a voice asking them what their purpose is in the Deep Realm, and Puddleglum replies that they fell down by accident. The voices replies that many fall down, but few return to the sunlit land. The person who is speaking turns on a light and his lamp reveals a huge army of sombre-looking Earthmen. The leader of these men introduces himself as the Warden of the Underworld, and instructs them to come with him to see the Queen of the Underworld. After walking some distance, they reach a boat which carries them to the other side of the underworld across a vast lake.
Eustace, Jill and Puddleglum finally finish the boat journey, and the Warden takes them to living quarters in the next phase of the Underworld. They are taken in by a knight wearing an ornate silver mask, and Eustace recognises him as the knight on horseback who had been travelling with the Lady of the Green Kirtle the previous day. The knight then shows them the Silver Chair itself - he is later restrained in it by two Earthmen, only for the others to set him free. The knight then destroys the chair with his sword and snarls: "Lie there in ruin, vile engine of sorcery." The Knight rips away his mask and introduces himself as Prince Rillian. He thanks them all for rescuing him, and asks if his father is still alive. "He lives, my lord, but is old and frail", is Puddleglum's response. They then proceed to leave the apartment, but the door opens just as they about to exit, and the Lady of the Green Kirtle walks in. She sees the ruined chair, and demands to the travellers: "Which one of you three has dared destroy the silver chair?"
Prince Rillian then confesses to his mistress that he destroyed the chair, and proceeds to tell her that he is no longer her slave - but is the rightful heir to the Narnian throne. The witch then uses her spells to convince Eustace and Jill that the "other world" (their own world and Narnia) does not exist, and that her world (the underworld) is the only world. Puddleglum then defies the witch, only for her to knock him out with a vicious spell. She continues to hypnotise the children, while Puddleglum regains consciousness and places his hand in the witch's fire, screaming: "Aslan!" The witch's spell on the children is crushed and they regain their memory of the overworld. Puddleglum then continues to tell the witch that he definitely did live in a place called Narnia, and even if there isn't such a place, then it is far better than the "black pit of a world" that she could come up. He finishes his taunt by stating: "We four can create a dream world to lick your real one hollow!" The witch is furious that Puddleglum has threatened her, and as he and the other three proceed to leave, she turns into a serpent but is quickly killed by Rillian. The prince then realises that the serpent who killed his royal mother was no other than the Lady of the Green Kirtle. They then flee the apartment, but everything suddenly starts to rumble and the roof is falling down - because the witch had ordered her slaves to dig through the roof of the underworld for an invasion of the overworld. Earthmen are panicking and running all over the place outside, but the four overworlders manage to get through the carnage and reach a patch of light near the very top of the overworld. Jill goes first and the others notice that she disappears. Eustace follows her through and they are helped through the gap by two fauns. They shout back to the others that they are in Narnia and when they come through, Glenstorm the centaur instantly recognises the last one of them as Prince Rillian.