Sara is an unusual child. She speaks Hindustani, French and English, has read almost every book in her father's library and uses fantasy to imagine herself a princess. When her Army captain father leaves her at a boarding school in London, Sara is distraught but makes friends and wins over the headmistress, Miss Minchin, by her intelligence (and her wealth). However, when news arrives that Sara's father has died and that his fortune has been lost, Miss Minchin turns Sara into a servant, banishing her to a rat-infested attic. Sara suffers cold and hunger, but at the moment she believes she can survive no longer, she finds her bare room transformed to a place of warmth and magnificence. Is some magic at work? Is Sara actually the princess she fantasized?