The Graveyard Book is the story of Nobody Owens, a child raised by ghosts after the murder of his family by the mysterious Man Jack. Nobody's childhood and youth loosely parallel the plot of Rudyard Kipling's The Jungle Book. The main bulk of the book follows Nobody on his adventures in the graveyard and in attending locales as he is raised by his parents, the ghostly Owenses, and by his mentor Silas, strongly implied to be a vampire. Nobody solves his parents' murder, finds revenge, and leaves the graveyard.
The story begins as Jack Frost, (usually referred to in the novel as 'the man Jack') murders most the members of a family (later revealed to be the Dorian Family) except for the toddler upstairs. Unknown to him, the toddler has climbed out of his crib to explore. The toddler crawls out of the house and up a hill to a graveyard where the ghosts find him. They discuss whether to keep him until the Lady on the Grey (implied to be the Angel of Death) appears and suggests that the baby should be kept ("The dead should have charity").
The ghosts accept and Mrs. Owens (the ghost who first discovered the baby) and her husband, Mr. Owens, become the foster parents. The baby is named Nobody Owens (as Mrs. Owens declares "He looks like nobody except himself") and is granted the Freedom of the Graveyard, which allows Nobody to pass through solid objects when in the graveyard, including its gates. The caretaker Silas (subsequently implied to be an ancient and formerly evil vampire, now reformed) accepts the duty of providing for Nobody. The man Jack is persuaded by Silas that the toddler has crawled down the hill, and he eventually loses the trail.
The bulk of the book is about Nobody's (often called Bod) adventures in and out of the graveyard as he grows up. As a boy, he befriends a girl called Scarlett Perkins and she is eventually convinced by her mother that he is her imaginary friend. It is with her that Bod discovers a creature called the Sleer, who has been waiting for thousands of years for his "Master" to come and reclaim him. The Sleer's greatest duty is to protect the Master and his treasure from the world. Scarlett's parents believe she has gone missing during this adventure, and when she returns consequently decide to move the family to Scotland. Nobody is once captured by the Ghouls and then rescued by his tutor Miss Lupescu, discovering she is a Hound of God (i.e. a werewolf). Bod befriends Elizabeth Hempstock, the ghost of an unjustly-executed witch, and, through a short adventure that includes being kidnapped by a greedy pawnshop owner, finds a gravestone for her. Once, he tries to attend regular primary school with other human children but it ends in a disaster as two bullies make it impossible for him to maintain a low profile.
Throughout his adventures, Bod learns supernatural abilities such as Fading (allows Bod to turn invisible, but only if no one is paying attention to him), Haunting (which allows Bod to make people feel uneasy, though this ability can be amplified to terrify them), and Dream Walking (going into others' dreams and controlling the dream, though he cannot cause physical harm). These abilities are taught to Bod by his loving graveyard parents, his ghost teacher Mr Pennyworth, and Silas.
Years pass by, and it is revealed that Jack has still been searching for the toddler that he had failed to kill. He must complete his assignment or his ancient, secret society, the Jacks of All Trades, will be destroyed by the surviving boy.
On Bod's 14th year at the graveyard, Silas and Miss Lupescu both leave to attend some business. Meanwhile, Scarlett and her mother come back to the town as her parents have divorced and she and Bod reunite. Scarlett has also made friends with a historian called Mr. Jay Frost who is living in a house not too far from the graveyard. Researching the murder of Bod's family, Scarlett learns that the historian lives in the house that Bod once lived in. Bod visits the house, in an effort to learn more about his family. When showing Bod the room he lived in as a baby, Mr Frost reveals that he actually is the man Jack; Jack Frost is his full, true name.
Bod is chased by the man Jack and four other members of the Order, the Jacks of All Trades. Bod and Scarlett escape to the graveyard where Bod is able to defeat each Jack separately, except for Jack Frost. Jack Frost takes Scarlett captive in the chamber of the Sleer but is then tricked by Bod into claiming himself as the Sleer's master. The Sleer engulfs Jack Frost in an "embrace" and they disappear into the wall, presumably "protecting him from the world", forever. Silas returns and it is revealed that he and Miss Lupescu are members of the Honour Guard, devoted to protecting "the borders between things". With two other supernatural beings (the Ifrit Haroun and the winged mummy Kandar), they have fought the Jacks of All Trades throughout the novel (explaining earlier references made by the Jacks to losses in various cities around the world). Though they succeed in destroying the society, Miss Lupescu is killed in battle, to Silas and Bod's great sorrow.
Scarlett is shocked and appalled by the events of the night and Bod's questionable actions in the course of defeating Jack Frost (though it was the Sleer who killed Jack Frost, Bod knew it would happen and so arranged the events). Silas suggests the best course is to remove most of her memories of Bod and what happened that night. Bod disagrees with Silas, but Scarlett ends up with her memories taken anyway. Silas uses his power of suggestion to convince Scarlett and her mother to return to Glasgow.
In the final chapter of the book, Bod is "about 15" and is losing slowly the Freedom of the Graveyard and even his ability to see ghosts. At the end of the book, Silas gives Bod some money and a passport with the name of Nobody Owens. Bod says his good-byes to his family and friends and leaves the graveyard to embark on a new life.
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