Hands made of sewing needles re-make a doll to resemble 11-year-old Coraline Jones. A little later, Coraline and her family relocate from Pontiac, Michigan to Ashland, Oregon. They move into the Pink Palace Apartments, which are rather dilapidated and one hundred and fifty years old. It is also occupied by retired actresses Ms. Spink and Forcible, and eccentric Russian acrobat Mr. Bobinsky, who claims to be training a mouse circus. Coraline’s parents work for a garden catalog and are often too busy to pay attention to her.
Coraline decides to explore their new home, meeting Wyborn “Wybie” Lovat, the grandson of the apartments’ landlady, Mrs. Lovat. While exploring, she finds a small brick-sealed door. That night, Coraline follows a mouse through the door, where she discovers the bricks have been replaced by a long corridor. Coraline goes through it and finds herself in the Other World, which is a copy of her world and is inhabited by her “Other Parents”, who look similar to her real parents, but have buttons for eyes. In the Other World, her parents are much more attentive and everything is more interesting and magical. Coraline falls asleep in the Other World, and awakens back home.
Coraline goes to the Other World three times despite warnings from her neighbors and a cat that can talk in the Other World. The other copies include a copy of Mr. Bobinsky, who runs a real mouse circus, copies of a young Ms. Spink and Forcible, who perform a theater show, and a duplicate of Wybie that cannot talk. On the third visit, the Other Mother invites Coraline to stay in the Other World forever, on the condition that she has buttons sewn over her eyes. Horrified by this, Coraline rejects the offer. After she refuses to accept the Other Mother’s love, Coraline is thrown through a mirror into a secret room. Inside she meets the ghosts of three children (including Wybie’s grandmother’s twin sister), who were tricked by the Other Mother, into having buttons sewn into their eyes, thus trapping their souls. Coraline vows to free them by finding their stolen eyes. The Other Wybie helps her escape and stays behind, but when Coraline returns, her parents are nowhere to be found. After seeing her parents trapped in the mirror, Coraline discovers that the Other Mother has kidnapped them.
Coraline ventures into the Other World with a seeing eye stone she received from the real Spink and Forcible to play a “game”; to find her parents and the eyes of the ghost children. If she loses, she will stay forever. Using the stone, Coraline manages to retrieve the ghost children’s stolen eyes from the warped versions of the Other inhabitants. She confronts the Other Mother, who has decayed into an arachnoid witch with the same needle-hands that made the doll. One of the children warns her that Coraline will never be let go even if she wins. Coraline finds her real parents trapped in a snow globe and manages to trick the Other Mother and escape, blinding her and severing her hand. Coraline’s parents return with no memory of being kidnapped.
The ghosts appear to Coraline in a dream to warn her that even though she had freed them, she is still in danger. They tell her that she must get rid of the key, or the Other Mother will find it. They also tell Coraline not to be sad, because she is still alive. As Coraline prepares to toss the key into the well, she is attacked by the Other Mother’s severed clawed hand, but is saved by Wybie, who crushes it with a rock. With Wybie’s help, Coraline throws the key and the pieces of the claw hand down the well. Mrs. Lovat’s twin sister is revealed to be one of the three ghost children. The next day, Coraline hosts a garden party with her neighbors and meets Mrs. Lovat, and prepares to tell her about her adventures.