Sixteen-year-old Tessa Gray is an orphan. She lives with her aunt in New York in the late 1800s. When her aunt dies, Tessa receives a ticket from her brother, Nate, to join him in London. Two old women called the Dark Sisters meet Tessa’s ship, claiming Nate sent them. They kidnap Tessa and spend the next six weeks training her to use a supernatural ability she never knew she had. Tessa can Change, or take on the bodily form and thoughts of another person, living or dead. The Dark Sisters say they’re preparing her for someone they call the Magister. Tessa will marry him so he can have full access to her powers. Tessa escapes into their vast house. A dark, handsome young man named Will Herondale rescues her. As Tessa and Will make their way out, they discover a slaughterhouse filled with stripped, cut up human bodies and bloodstained knives and saws. The Dark Sisters appear, a battle ensues, and Will beheads one of the Sisters while Tessa is knocked unconscious.
Tessa awakes in the London Institute. She learns it is the headquarters of the city’s secret peacekeepers, a group of part-human/part-angel beings known as Shadowhunters or Nephilim. Shadowhunters are heavily tattooed warriors. They are able to conceal themselves with a magic called glamours. They’re mandated to protect the city from demons and other supernatural dangers. Charlotte, the head of the Institute, explains that Downworlders are people like vampires, werewolves, fairies and warlocks, who are at least part supernatural. Not all Downworlders are enemies of the Shadowhunters, but it is the Nephilim’s job to monitor their activities. While it’s unclear exactly what Tessa is, Charlotte explains that the girl’s shape-shifting ability means she’s a Downworlder.
Tessa meets the other inhabitants of the Institute, including Charlotte’s husband, Henry; a reluctant and snobbish Shadowhunter named Jessamine; and a sickly young man named Jem. Jessamine, Jem and Will are all orphans under the care of the Institute until the age of 18. Servants like Sophie, Thomas and Agatha are humans (or “mundanes”) with the gift of Sight who assist the Nephilim. When Tessa and Will describe what they’ve seen in their dealings with the Dark Sisters, Charlotte assures them that the Nephilim will investigate. She also invites Tessa to stay with them for protection, promising to help locate her brother.
The Dark Sisters are part of a group that includes mundanes and Downworlders called the Pandemonium Club. Members are not only involved in drinking, gambling and prostitution, but they delve into the world of magic and the occult. Charlotte and Henry pay a visit to a mundane named Mortmain, for whom Nate once worked. Mortmain admits to being a member of the Pandemonium Club and to having introduced Nate to it as well. He looks shaken as Charlotte warns him about the dangers of dabbling in the occult. Mortmain’s company makes cogs, the type Will found in the Dark Sisters’ home. He admits that a powerful Downworlder came to him looking for cheap machinery. Hesitantly, he names de Quincey, a vampire who has supposedly been an ally to the Shadowhunters. The Shadowhunters become convinced de Quincey is the one whom the Dark Sisters called the Magister.
The Shadowhunters discover more evidence that the Magister has already begun creating an army of automatons to destroy them. In an effort to catch de Quincey, they enlist the help of another vampire named Camille. Camille tells the Shadowhunters that de Quincey has parties in which he tortures and kills humans for sport. If the Shadowhunters can catch him in the act, they can punish him under the law. Tessa uses her powers to change into Camille so she can attend one of de Quincey’s parties and gather evidence. She discovers the mundane they plan to kill that evening is Nate. Once de Quincey has drawn Nate’s blood, the Shadowhunters infiltrate the vampire’s home. A battle ensues, and Shadowhunters destroy many vampires. De Quincey escapes, and the Shadowhunters rescue Nate.
As Nate’s condition improves, he tells the Shadowhunters about de Quincey’s plan to animate the automatons using demon energy. Charlotte, Henry and many of the rest of London’s Shadowhunters plan another attack on de Quincey. Will and Jem stay behind because they’re under 18 and not allowed to join the battle. When the older Shadowhunters have gone, Mortmain shows up and urges Will and Jem to go to the home of the remaining Dark Sister. He says she plans to cast a spell that night that will animate the automaton army with demon energy. With Will and Jem gone and the Institute largely unprotected, the real Magister, Mortmain, and his automatons attack. Nate, who has been working with Mortmain since the beginning, aids in the battle against the Shadowhunters. Since Mortmain wants Tessa for her powers, she pretends to kill herself. Will, Jem and the other Shadowhunters return to the Institute in time to save everyone but Thomas and Agatha. Mortmain vanishes. Charlotte asks Tessa to stay on at the institute and serve as a liaison between the Shadowhunters and the Downworlders.