In a make-believe world, based loosely on Bombay and Kashmir, the story of Haroun is a tale of a fight between the free imagination and the powers that oppose it. Haroun's father, Rashid, the Shah of Blah, is a professional and gifted story-teller, a popular figure much in demand at public events. Feeling neglected, his wife is persuaded to leave him
and run away with a neighbour. After this, Rashid loses confidence in his powers of story-telling, haunted by his son's question: “What's the use of stories that aren't even true?” Rashid is due to speak at a political rally to be held by the sinister politician, Snooty Buttoo. He is told that if he does not come up with his usual fund of tales, his
tongue will be cut out. As Rashid despairs, Haroun determines to rescue his father's talent – a project which takes him into an exotic world of water genies, mechanical birds, fantastical creatures, Guppees and Chupwalas. He learns that the Ocean of the Sea of Stories, the source of all stories, is being polluted by the enemy of all stories, the sinister
Khattam-Shud. In a series of brilliantly imagined adventures, Haroun succeeds in defeating the powers of darkness, and restoring happiness to his family and to the city where he lives.