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In England, one year has passed since the Pevensie children returned from Narnia. They are first seen waiting at the Strand tube station for their train to boarding school. As the train pulls in, the station collapses and the Pevensies are transported back to Narnia. There they discover the ruins of their castle, Cair Paravel, and realizing it had been attacked in their absence, they set out to find out why.

In the Telmarine castle, the lords of the council find out that Prince Caspian is gone. Lord Sopespian blames Miraz, but Miraz and General Glozelle show them Trumpkin. Miraz blames the Narnians and tell the lords to fight them to get Caspian back, though Miraz actually wants to kill Caspian.

The Pevensies save Trumpkin from being drowned by two Telmarines; he quickly realizes that the four children are the Kings and Queens of Old and they all continue on together. On the way, Lucy glimpses Aslan and tries to convince the others that she's seen him, but only Edmund believes her.

Meanwhile, Nikabrik and Trufflehunter lead Caspian to the Dancing Lawn, where the old Narnians have assembled, including the swashbuckling mouse Reepicheep, and a large number of dwarves, giants, centaurs, fauns, minotaurs, and talking animals. There, Caspian convinces the Narnians to help him win his throne so that he can give them back their land. Caspian and the Narnians steal a number of weapons from the Telmarines. Caspian and his troops encounter the Pevensies and Trumpkin; they all journey together to Aslan's How, a huge barrow built over the Stone Table. From there, Peter decides that they will attack Miraz's castle. Lucy suggests waiting for Aslan to give instructions, but Peter thinks they have waited for Aslan long enough.

The Narnians succeed in raiding Miraz’s castle, but Peter calls for a retreat when he realizes that they are being overwhelmed by Telmarine soldiers and if they keep fighting they will all be killed. Peter, Susan, Edmund, Caspian, and half of the Narnians manage to escape, but the rest are trapped and slaughtered. When they get back to Aslan's How, Peter and Caspian, who are both feeling guilty and upset over the loss of half their soldiers, have an argument about the attack on the castle, which almost culminates in a swordfight. Back at the castle, the councilmen and lords decide to crown Miraz King of Narnia.

Later, Nikabrik, with aid of a hag and a werewolf, tells Caspian that they can help him claim his throne and guarantee Miraz's death. However Nikabrik tricks Caspian and the hag then uses black sorcery to summon the White Witch, and from inside a wall of ice, the Witch tries to convince Caspian to give her a drop of his blood so that she may be free. Peter, Edmund, Lucy and Trumpkin promptly arrive and kill Nikabrik, the werewolf, and the hag, and Edmund shatters the wall of ice before the Witch can be freed.

As Miraz and his army arrive at Aslan's How, Caspian suggests that Peter and Miraz duel one-on-one under the condition of surrender, in order to buy Lucy and Susan time to find Aslan. Miraz accepts, as it would look cowardly to refuse to fight a boy half his age. Susan and Lucy are chased by Telmarine soldiers during their search; Susan sends Lucy off and remains behind to deal with the soldiers, but she is rescued by Caspian and the two return to the battle. Peter is able to wound Miraz, but gives his sword to Caspian to finish him off. Caspian, who cannot bring himself to do it, spares Miraz's life but says that he intends to give Narnia back to its people.

Lord Sopespian suddenly stabs and kills Miraz with one of Susan's arrows and accuses the Narnians of shooting Miraz. General Glozelle and Lord Sopespian then lead the Telmarines. The Telmarine cavalry charges while the troops use their catapults against Aslan's How. The Narnians try several tactics, including collapsing underground halls beneath the advancing Telmarine army and sending griffins overhead with archers in their claws. Finally in a desperate move, they charge head on. Lucy, meanwhile, finds Aslan in the woods and he awakens the trees that have long been in a deep sleep. The tide of battle quickly turns as the trees join in attacking the Telmarines. Lord Sopespian orders retreat to a bridge, where they are confronted by Lucy and Aslan. Aslan summons the river god, who destroys the bridge and wipes out the majority of the Telmarine army. The river god then eats Lord Sopespian. The battle is won with the surviving Telmarine soldiers surrendering and handing over their weapons.

Before the Pevensies depart, Peter and Susan declare, much to Caspian, Edmund, and Lucy's dismay, that Aslan has told them they will never return to Narnia. Aslan explains that Susan and Peter have gained everything they could possibly gain from their experiences in Narnia and are no longer needed there. Susan and Caspian share a kiss, knowing they will never meet again. The Pevensies then go back to England, leaving Caspian as King of Narnia.

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