When 11-year-old Jay Ziegler falls from a treefort after being pursued by bullies who wanted his father's precious telescope, he ends up in a coma - in the real world (known as the Upworld). In the Upworld, Jay's mother Val, his best friend Donna and the bully Keith all try to cope with their reality. In the Downworld (Jay's mind), Jay finds himself in a world entirely populated by children, where he meets up Alpha and Flash (the Downworld counterparts of Donna and Keith) and the trio embark on a mysterious mission involving a telescope, the land's mysterious leader ...
In the Upworld, Jay's coma worsens and he's taken to intensive care, causing Val to be faced with the prospect that her son may never recover. Meanwhile in the Downworld, Jay believes that his connection to home lies in the Tower, so he sets out with his companions to find it.
In the Upworld, Jay's condition becomes more stabile and his classmates make him get-well-soon cards. Meanwhile, in the Downworld, as Jay and Alpha prepare for re-education at the mission, Flash recruits some tower-resistance fighters to help rescue the pair.
While Dr. Max is trying using a sensory deprivation pool on the comatose Jay in the outer world, Finger carries Jay bound in a hammock into Fractal's pit, where he hopes to make Jay into a harmless zombie using Fractal's inter-dimensional science. When Fractal resists and things do not go as planned, Finger seals up the cave with Jay and his friends inside, but, taking a hint from Fractal, they find a ventilation shaft and emerge at the tower.
While Max and Val try more sensory stimulation on Jay in the outer world, in the inner world Jay and his friends arrive at the trading post where Jay is seized by Prop as a counterfeiter of checkpoint passes and sentenced to have his head shaved, but is saved by Frances X, Checkpoint Keeper, and passes through Checkpoint Three. Meanwhile in the outer world, Val reads Jay a birthday card from Jay's dad, and Jay rouses very slightly.
In the inner world, Jay et al. reach the Tower, but Brad has been grounded by Macro and is unavailable. The Board discusses the mystery which is Jay and how to use him to their own advantage. As Jay bursts in on the meeting, Macro tells Jay he will be the new Tower leader and goes to fetch Brad who turns out to have escaped - while Fractal uses a piece of his crystal and regression hypnosis to show how in the outer world, Jay came to travel to the inner world, but Macro smashes the crystal and tells Jay the only way he can get back to the outer world is to find the ...
Jay recognizes Brad as a child-version of his own dad, and Brad reveals to Jay the Vest of Power which, if Jay wears it, will take him back home to the outer world, but when Jay arrives there, he does not find his adult dad and returns. Instead he sets out to travel to the lighthouse where the vest seems to have originated.