The story is told in a combination of illustrations, letters and short chapters of narrative.
Spymaster Ysoret Clivers of Elfland writes a letter to his friend about Brangwain Spurge. Spurge is an elfin historian and was a boyhood schoolmate of Lord Clivers. When the elf king Degravaunt orders Clivers to select a historian to visit the goblin court and deliver a present to their king, Ghohg the Evil One, Clivers chooses Spurge for the mission. Spurge will deliver a historically significant goblin gemstone recently unearthed in Elfland.
The goblins and elves have had a long, bloody history of war but declared a truce five years ago. The elf king wants to make a gesture of goodwill by sending the gemstone, but no elf in recent memory has returned from the goblin citadel of Tenebrion alive. Clivers is worried about Spurge’s chances of surviving and improving the peace.
Spurge flies to Tenebrion because the fastest route between the two nations is via a capsule shot through the air with a giant crossbow. Werfel the Archivist, a goblin historian, eagerly awaits Spurge’s arrival. Werfel was selected to be Spurge’s guide and host in goblin land since they share many common interests. Werfel is unable to sleep the night before Spurge’s arrival because he’s excited to meet another historian and create more understanding between their nations.
Cultural misunderstandings begin before Spurge has even arrived in Tenebrion. When the goblins hear that their elfin guest’s capsule is coming close to the city, they send a three-headed wyvern to gently bring the capsule down so Spurge doesn’t have a rough landing. Spurge, however, sees the wyvern as a monster that is trying to eat him and jumps out of his capsule, holding the gemstone. He lands in a lake populated by water serpents, but the goblin guards rescue him and bring him to Tenebrion. An enthusiastic Werfel rushes forward to greet Spurge, but Werfel’s appearance is so frightening, Spurge faints before the greeting is complete.
When Spurge wakes up in Werfel’s house, he is disgusted by everything around him. Elf culture and goblin culture are very different. While Werfel is interested in learning about elves, Spurge is completely uninterested in learning about goblins. Also, Spurge refuses to open the case holding the gemstone and stubbornly insists that it is too important to show to anyone but King Ghogh himself. Werfel has been instructed to show Spurge the city for a few days before taking him to the king, so Spurge decides to carry the gem’s case on a heavy chain around his neck.
Further cultural misunderstandings ensue. Goblins are polite to strangers and rude to friends, and Spurge is offended at all the terrible things goblins say to their close friends. Spurge is invited to a party at the du Burgh family’s house, and even though they all attempt to speak to him in broken Elven, Spurge is repulsed by their bungled attempts to recreate his culture. When a musician at the du Burgh house sings an ancient ballad about the elf and goblin wars, Spurge is so angry he starts protesting loudly to Werfel, who is barely able to lead Spurge away before the knight Regibald du Burgh decides to kill Spurge for his insult.
Spurge also sneaks away periodically to send secret messages to Spymaster Clivers. He goes into a trance to send magical mental pictures back to the elfin citadel of Dwelhome, but the messages are merely images of reality as he perceives it, and so contain many exaggerations. Werfel realizes that Spurge is sending messages back to Dwelhome, so he resolves to be an even better host, but Spurge doesn’t make the task easy for him. Over several days, Spurge consistently shows his disgust with every aspect of goblin culture and insists on correcting anyone who says that the elves started the most recent war.
Spurge’s bad behavior reflects negatively on his host Werfel, who receives bad treatment from everyone whom Spurge offends. When Spurge sneaks out of the bathroom during an opera and runs away to try to break into the goblinish power source known as Well of Lightning, Werfel is at his wits’ end.
Werfel angrily tells Spurge to stop abusing his hospitality. That night, a member of the goblin secret police comes to Werfel’s house, demanding to know if Spurge is a spy. Werfel doesn’t know how to answer since he’s certain that Spurge is a spy but is still unwilling to betray his unpleasant guest to the secret police.
In a letter to the King of Elfland, Spymaster Clivers reveals that Spurge’s spy mission is really an assassination mission. The gemstone, when taken out of its case and tapped lightly, will create a black hole that sucks in and destroys everything within a mile’s radius. When the bomb goes off, the elfin armies plan to take advantage of the chaos and storm Tenebrion, wiping out all goblins forever.
Spurge, pleased that Werfel refused to betray him, makes an overture of friendship and invites Werfel to be his guest in Dwelhome. He offers to let Werfel examine the gemstone with him, as fellow scholars. They begin tapping the stone and almost detonate it when a summons from King Ghohg arrives.
Spurge and Werfel go to the goblin court, but a trained beast called a vork recognizes Spurge as the person who tried to break into the Well of Lightning the previous day. They narrowly escape. Spurge and Werfel flee the city, and Spurge realizes he has lost the gemstone.
Spurge and Werfel keep running away from Tenebrion, evading hungry ogres and trying to avoid the goblin army. Finally, they are caught between an angry Regibald du Burgh on one side and a sudden desert firestorm on the other. They enter the ruins of a deserted ancient city, and all hope seems lost. They are nearly engulfed by flames, but they luckily fall through a wall and slide down to an underground castle. As they explore the impressive ruins and discuss ancient books they have both read, the two historians begin to form a real friendship.
When they emerge from underground, they are shocked to see goblin armies arrayed to fight oncoming elf armies. Spurge, who thought he was on a combination spy mission and diplomatic mission, is dismayed to see another war on the verge of breaking out.
Regibald du Burgh catches up to them near the ruins of the Glass Tower. Regibald wants to murder Spurge, but Werfel challenges him to a duel. Spurge finally realizes all of Werfel’s great kindness toward him and refuses to let him fight the duel, instead picking up a long pillar of sharp glass from a nearby ruin and charging at Regibald. Regibald chases Spurge into the Glass Tower, but Regibald’s weight causes the tower to collapse. He is injured in the fall, but Werfel and Spurge escape intact and continue walking toward Elfland.
A few days pass, and elf troops, amassed for war, capture Spurge and Werfel. Spurge is heartbroken to realize that he’s not being welcomed home as a hero but being imprisoned as a criminal for failing at his mission. Clivers arrives to question Spurge and Werfel and shows them the transmissions that Spurge has sent all this time.
The picture transmissions are factually incorrect, showing Werfel to be almost twice as tall as Spurge when he is actually shorter. Werfel is stunned that Spurge had such inaccurate and unflattering impressions of goblin land and of himself. Clivers sentences them to die, but when the executioner leads them away, they manage to knock him out and escape from the elfin camp.
The two scholars climb into the mountains to watch the elf and goblin armies parlay. The parlay must include a ceremonial exchange of gifts, but after the elves give the goblins an old sword, the goblins give Clivers the gemstone-bomb, which Spurge left behind. Spymaster Clivers drops the gemstone, detonating the bomb. This draws both Ghogh and the elf king inside. Spurge wants to record the historical moment, so both elves and goblins can know that they’re free of their tyrant overlords and no longer have cause for war.
A week later, the world is in chaos. Neither the goblins nor the elves have a leader. Spurge and Werfel must keep traveling back and forth between the two countries to share information and help both people groups find a new way forward. Spurge’s skin keeps itching, and he realizes that he needs to peel off his old skin, just as Werfel has done many times in the past, which implies that goblins and elves are really the same species, separated by time and distance.