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After her mother takes her own life, Celia Bowen is delivered to the theater where her father, Hector Bowen, is working under the stage name Prospero the Enchanter. Hector becomes quite interested in the remarkable power the five-year-old demonstrates when she breaks a teacup and immediately reforms it. Realizing Celia is special, Hector contacts his old competitor, the man in the grey suit, and challenges him to a game. After seeing Celia’s abilities for himself, he agrees to Hector’s proposal and finds an orphan, Marco Alisdair, to be his player. Both children are bound to their challenge with a ring. Their identities are initially kept secret from the other.
Years pass as Marco and Celia are trained in magic using very different methods. Both Hector and the man in the grey suit are vague about the rules of the challenge, but training for it becomes Marco and Celia’s whole existence. When Marco comes of age, he moves out and begins his life as an independent person. He meets a young woman named Isobel Martin, with whom he develops a romance. Meanwhile, Celia travels with her father disguised as a spiritual medium until they land permanently in New York. While there, Hector attempts a challenging manipulation of magic. It goes horribly wrong and results in Hector dissolving into a non-corporeal form. Hector's death is announced, but he lives on as a ghostly version of himself.
In London, the man in the grey suit arranges for Marco to begin working as assistant to acclaimed theater producer, Chandresh Christophe Lefèvre. Chandresh begins work on the Night Circus along with a group of talented people who help bring his vision to life. The group becomes known internally as the Conspirators. Chandresh’s fellow Conspirators are Ethan Barris, Ana “Tante” Padva, Tara and Lainie Burgess, and the man in the grey suit, whom they call Mr. A. H—. The Conspirators are unaware that the circus is also the venue for Celia and Marco’s magical challenge. As the circus nears its opening, a mysterious woman named Tsukiko joins the Conspirators. She is hired to become the circus’s contortionist. A renowned German clockmaker, Herr Friedrick Thiessen, is commissioned to make a clock for the circus. When it is complete, his Wunschtraum clock, or dream clock, serves as the circus’s centerpiece. Soon after, the man in the grey suit sends a note to Hector’s ghost, indicating that the challenge is officially underway. Celia auditions at the Night Circus as an illusionist. Her demonstration is so incredible that Chandresh has Marco dismiss the others in the waiting room and decides she will be the sole illusionist at the Night Circus. Marco realizes immediately that Celia is his opponent.
The circus opens at dusk just outside of London in October of 1886. Marco turns the elaborate bonfire-lighting ceremony into a secret ritual that binds all the participants to the circus. That same night, the Murray twins are born. The Night Circus travels the world as the challenge unfolds over the course of the next several years. Though neither really understands the rules of the game, Celia and Marco make moves by creating new attractions run by their magic. It is easier for Celia, who travels with the circus. Because Marco is stuck in London, he uses Isobel to spy for him. It isn’t until a chance encounter in Prague that Celia discovers Marco is her opponent. Celia declines Marco’s initial request to speak about the challenge. Sometime later, Celia begins attending the dinners that Chandresh holds for the Conspirators, where Marco is in attendance. Marco and Celia become increasingly drawn to one another, and this fascination slowly develops into love.
When Hector realizes that Celia is trying to find a way to be with Marco, he reveals that the challenge is one of endurance, and the only way to win is for one of them to be unable to participate. Celia is upset and hopes to find a way around the rules. Celia starts studying Marco’s style of magic to find a way to disentangle herself from the Night Circus so it can continue on without her. When she learns that Tsukiko was the victor of the previous challenge, Celia seeks her advice. Tsukiko does not agree to help but says she will step in on behalf of the circus if necessary.
A young man named Bailey Clarke becomes fascinated with the Night Circus when it arrives near his home in Concord, Massachusetts. Bailey is ten when his older sister dares him to break into the circus during the daytime. While there, he meets Poppet Murray, who offers him her glove as proof that he made it inside. When the circus returns many years later, Bailey spends several nights exploring its mysteries with Poppet and Widget. Poppet foresees that Bailey will be involved in a moment that puts the circus’s fate—and all those tied to it—in peril. She asks Bailey to leave with the circus when it departs Concord. That night, the circus leaves before Bailey can make it back, so he travels with a group of fans, known as the rêveurs, who follow the circus to its new location outside of New York.
Isobel finds Marco in London and blows a powder in his face that transports him to the circus. He is met by Tsukiko, who tells him that Celia is planning to forfeit the challenge by taking her own life. She offers to lock him away in the circus’s bonfire to take him out of the game first. Celia discovers their plan and, to protect Marco, she binds them both to the circus while dissolving their corporeal forms. Celia suspends the rest of the circus in time until she can figure out how to keep it together.
Bailey arrives at the circus to find it completely frozen in place save for Tsukiko, who guides him to the ghostly remnants of Celia and Marco. The two explain that Celia is holding the circus together, but her magic is waning. They ask Bailey to take over the circus and offer to teach him to control it. He agrees because he loves the circus and Poppet, who will be lost if the circus disappears. The novel closes with the challenge being deemed a stalemate as neither Celia nor Marco can participate. Poppet, Widget, and Bailey take over the Night Circus and it continues to the modern day.
