Milo, a very bored little boy, receives an unusual package one day: a make- believe tollbooth. When he drives through it in his electric toy car, he is suddenly transported to the Lands Beyond, a fantastic world of imagination. On his way to Dictionopolis, one of the country's two capitals, he meets Tock, the watchdog who joins him on his journey. In Dictionopolis, Milo meets King Azaz who presides over the world of letters and words. Azaz sends Milo on a mission to rescue two princesses, Rhyme and Reason, who are imprisoned in the Castle in the Air, which floats hundreds of feet off the ground. Milo and Tock leave Dictionopolis with a new companion, the Humbug, whom Azaz has sent along as a guide. The three head toward Digitopolis where they hope to persuade the Mathemagician to release the princesses.
On their way to Digitopolis, Milo, Tock and the Humbug encounter all sorts of unusual people and places. Just outside Dictionopolis they stop at Point of View, where they meet Alec Bings, a little boy who floats above the ground because he has not grown down to it yet. In his family, everyone's head stays at exactly the same height their entire lives and their legs grow down until they touch the earth. The travelers then proceed past the twin cities of Reality and Illusions and come upon Chroma and his symphony of color. Milo watches in wonder as Chroma conducts the orchestra through the colors of the sunset and, once Chroma has gone off to bed, decides to try to conduct the sunrise himself. This proves to be more difficult than Milo thought, and soon he has made a complete mess of the colors, which he manages to fix just moments before anyone notices.
The exhausted Milo then leads his friends towards the Valley of Sound, where they meet Dischord, a fake doctor who deals in noises, and his sidekick Dynne, a monster made of smoke. Once the travelers escape the doctor and his horrible racket, they find themselves in the Valley of Sound, which turns out to be completely silent. They meet the Soundkeeper who has withheld all the sounds of the Valley because people have stopped appreciating them and instead gave business to Dischord and Dynne. Milo steals a sound from the Soundkeeper's palace, which the people of the valley use to break open the sound vault.