The Night Circus tells the story of the rivalry between two different forms of magic—the old and the new—and the competition and love affair between two young magicians who are destined to face each other in a magical duel to the death.

The novel opens in 1873, as five year-old Celia Bowen is left at the office of Prospero the Entertainer, her estranged magician father, after her mother’s suicide. Though Prospero does not wish to raise his child, he nevertheless becomes fascinated by Celia’s mastery of “new magic.” Prospero immediately contacts his former teacher, the Man in Grey, and requests a duel to the death between their magical protégés: a clash of old magic and new. Inspired by Prospero’s challenge, The Man in Grey locates a pupil of his own, a young orphan named Marco Alasdair, to whom he teaches the ways of “old magic.” Upon turning 18, Marco is sent to work for Chandresh Christopher Lefevre, who is the creator of the Night Circus, a mysterious traveling circus featuring mesmerizing—and sometimes magical—shows and exhibits. Chandresh also hires Celia Bowen as an illusionist and, in turn, unknowingly establishes the Night Circus as a venue for the impending magical battle between Celia and Marco. While Celia and Marco are not aware that they are each other’s destined opponents, all of their actions are part of an elaborate game of magical chess that only one of them will survive. 

Over time, Marco discovers that Celia is the person he will have to duel. When he is sent away to study under Chandresh at the Night Circus, Marco sends the fortune teller, Isobel, who is also his girlfriend, to spy on Celia and her development as a magician. However, once she arrives at the circus, Isobel unknowingly casts a spell which serves to protect the circus and creates a magical balance and harmony between Marco and Isobel that ensures their safety and that of all the other circus performers. Both Marco and Celia work carefully to out-craft each other and create mystifying circus tent exhibitions to impress both the audience and each other. Despite their rivalry, Marco and Celia begin to realize that they are falling in love with each other. However, they both remain unaware that the Night Circus exists, ultimately, to serve as a venue for their upcoming duel and that they control the lives of the other circus performers (who lack freewill and serve only as pawns in the magical battle between Marco and Celia). Soon, the love that develops between Marco and Celia begins to affect the circus. The realization that Marco is falling in love with Celia causes Isobel, who controls the circus with her thoughts, to lose concentration, which causes the death of one of the circus members.

On Halloween of 1902, a furious Isobel destroys the magical spell that connects Marco and Celia and allows the circus to function safely. As a result, the forces of danger and mortality enter the circus, and Chandresh kills a man. Realizing that the circus is falling apart, Celia attempts to restore its mystical balance. Willing to sacrifice her life for the sake of Marco and the other performers, Celia annihilates her physical self, saves Marco, and enters into a dreamlike state of existence together with Marco, saving the circus and allowing the two lovers to be together and to watch over and protect the circus for eternity.