In a post-apocalyptic future, London is a traction city that rolls across wastelands on huge wheels, searching for smaller traction cities to devour. London rises in seven tiers, with the engine rooms at the bottom in the Gut and the wealthy residential areas up at the top, in Tier One. Tom Natsworthy is a teenage apprentice at the London Museum in Tier Two.
When London catches a smaller town called Salthook and begins to dismantle it, Tom is assigned Gut-duty and goes to make sure any important historical documents or artifacts from the town are sent to the Guild of Historians. Tom discovers that he will be assisting his hero, Thaddeus Valentine, the head historian, in the Gut.
He meets Valentine’s daughter, Katherine, an adventurous girl about his own age. A teenage girl from Salthook attacks Valentine with a knife, but Tom stops her before she hurts him. The girl flees, and Tom chases and catches her.
This teen, Hester Shaw, has a horribly scarred face and she tells Tom that Valentine is the one who scarred her. Hester jumps over the side of London, apparently falling to her death. When Valentine learns that Tom talked with Hester, he pushes Tom over the side of London.
Tom wakes up on the muddy ground near Hester. As London drives away, they decide to work together and pursue the city — Hester wants vengeance, and Tom wants to go home.
In London, Katherine begins to question her father’s behavior. He is acting suspicious. She overhears him talking with London’s Lord Mayor Crome about something called MEDUSA. Crome decides to send Valentine on a mission to Shan Guo, a country that leads the Anti-Traction League, the nonmoving countries that rest in India and China, surrounded by mountains. As London travels eastward over the Hunting Grounds and toward Shan Guo, the citizens wonder what the Lord Mayor is planning. Katherine wonders about her father’s connection to Hester Shaw.
Hester tells Tom that Valentine used to be a friend of her mother’s. Seven years ago he killed her mother in order to steal a weapon called MEDUSA from her. Hester and Tom are taken aboard a small traction town called Speedwell. The mayor of Speedwell drugs Tom and Hester and intends to sell them as slaves. They escape, however, and find passage on the Jenny Hanniver, a small airship captained by aviatrix Anna Fang.
They arrive in Airhaven, only to find themselves being hunted by a Stalker from the Lord Mayor, a reanimated corpse that functions like a zombie-robot and follows the commands of its owner. Hester knows this Stalker, whose name is Shrike, and she is confident he won’t attack her. When Valentine orphaned Hester, Shrike found her. He rescued her, which was surprising since he never showed any other signs of tenderness toward living humans.
She lived with Shrike for five years before escaping to search for London and avenge her mother's death. In the present, Shrike makes it clear that he will kill Hester. The two teenagers run from him and hijack a travel balloon to escape. They abandon the balloon and are soon walking again, pursuing London.
Tom and Hester walk through the Rustwater Marshes and meet Shrike, who has left his airship to hunt for them on foot. Before Shrike can kill Hester, he is run over by a small traction town. Hester and Tom barely dodge the wheels of a second, larger town, which they hitch a ride on.
Tunbridge Wheels is a haphazard suburb that turns out to be a pirate settlement. Peavey, the pirate-turned-mayor of Tunbridge Wheels, wants to learn manners and etiquette, and he asks Tom to teach him manners, since Tom is a proper London boy.
In London, Katherine goes to the underdecks to find Apprentice Bevis Pod, the only person who might have seen what happened to Tom and Hester the night they supposedly died. Bevis tells her many secrets about London. He says that the slaves in the lower tiers of London are sent to Lord Mayor Crome’s friend Dr. Twix when they die. Dr. Twix is trying to build an army of Stalkers as part of a project code-named MEDUSA. Crome has scheduled a meeting at the Engineerium to explain MEDUSA to the Engineer’s Guild, and Katherine asks Bevis to help her sneak into the meeting.
Tunbridge Wheels is an amphibious city, and it sinks into the water after running over some rocks. Peavey escapes with Tom, Hester and a few pirates, but soon the pirates turn on Peavey and shoot him. Shrike arrives and kills the pirates before they can harm Hester. Shrike announces that he intends to kill Hester and take her body back to London so that she can be made into a Stalker and live as his eternal companion. Tom strikes Stalker with a sword, killing him permanently.
At the Engineerium meeting, Katherine and Bevis hear Crome announce that MEDUSA was an ancient experimental energy weapon. Long ago, Valentine discovered the plans for MEDUSA while voyaging in America. Seven years ago, Valentine found the actual computer brain that powered MEDUSA and made it functional.
Crome plans to attack the Shield Wall of Batmunk-Gompa and overrun the Anti-Traction League’s fortress city on the edge of Shan Guo. Once inside the shield wall, he intends to use Shan Guo as a new hunting ground, devouring all the immobile cities one by one. St. Paul’s Cathedral in London splits open to reveal MEDUSA, a crackling energy weapon that fires upon a nearby enemy city, disintegrating it.
Anna Fang finds Tom and Hester and wants to take them to Batmunk-Gompa to warn the citizens of Shan Guo that London has a weapon that can destroy them. Tom doesn’t trust Anna because she’s revealed to be a spy for the Anti-Traction League, who Tom has been taught are his enemies.
He eventually agrees to go with her. In Batmunk-Gompa, Tom sees a man dressed as a monk and realizes the man is Valentine, who has already infiltrated the city in order to help London invade. Tom warns Anna Fang and other agents of the League.
The warning comes too late. Valentine has already blown up the entire air fleet of Batmunk-Gompa so the citizens can’t escape or attack London from the air. Valentine duels with Anna and kills her. Anna’s death makes Tom realize that Valentine and everything he stands for are evil. Valentine flies back to London. Tom and Hester pursue him in Anna’s ship, the Jenny Hanniver.
After more investigation, Katherine discovers that her father killed Hester’s mother seven years ago and stole MEDUSA from her. Katherine is devastated. When Valentine returns to London, Katherine confronts him about his past. He maintains that all of his actions were done to provide for Katherine’s future.
Katherine disowns him as her father and asks Bevis to help her destroy MEDUSA. When they go to St. Paul’s Cathedral, Bevis is killed by a crashing airship. Hester disembarks on the Jenny Hanniver, but is captured by Stalkers who deliver her to Valentine. Valentine lifts his sword to execute Hester, but Katherine rushes forward to shield Hester. Valentine's knife stabs Katherine by accident.
As Katherine collapses, her hand falls on the command keyboard of MEDUSA, which is gearing up to fire on Batmunk-Gompa. The incorrect key combination keeps MEDUSA from firing, but causes it to keep building energy. Hester has compassion on Valentine and tries to help him carry Katherine to safety on the Jenny Hanniver, but Katherine dies.
Valentine tells Hester and Tom to sail away to safety. MEDUSA explodes, killing Valentine and destroying London. Hester tells a grief-stricken Tom that they will fly to a repair station and fix their airship, then choose a new path for their lives.