Sophie Amundsen (Sofie Amundsen in the Norwegian version) is a 14-year-old girl who lives in Norway in the year 1990. She lives with her mother and her cat, Sherekan, as well as with her goldfish, a tortoise, and two budgerigars. Her father is a captain of an oil tanker, and is away for most of the year.

The book begins with Sophie receiving two anonymous messages in her mailbox (the first asking, "Who are you?", the second asking, "Where does the world come from?") and a postcard addressed to 'Hilde Møller Knag, c/o Sophie Amundsen'. Shortly afterwards, she receives a packet of papers, part of a correspondence course in philosophy.

With these mysterious communications, Sophie becomes the student of a fifty-year-old philosopher, Alberto Knox. Initially, he is completely anonymous to Sophie, but he later reveals more and more about himself. The papers and the packet both turn out to be from him, but the post card is not; it is addressed from someone called Albert Knag, who is a major in a United Nations peacekeeping unit stationed in Lebanon.

Alberto teaches her about the history of philosophy. She gets a substantive and understandable review from the Pre-Socratics to Jean-Paul Sartre. Along with the philosophy lessons, Sophie and Alberto try to outwit the mysterious Albert Knag, who appears to have God-like powers, which Alberto finds quite troubling.

Sophie learns about medieval philosophy while being lectured by Alberto, dressed as a monk, in an ancient church, and she learns about Sartre and Simone de Beauvoir in a French café. Various philosophical questions and methods of reasoning are put before Sophie, as she attempts to work them out on her own. Many of Knox's philosophic packets to her are preluded by more short questions, such as "Why is Lego the most ingenious toy in the world?"

Alberto takes Sophie from the Hellenistic civilization to the rise of Christianity and its interaction with Ancient Greek thought on to the Middle Ages. Over the course of the book, he covers the Renaissance, Baroque, Enlightenment and Romantic periods, with the philosophies that stemmed from them.

Mixed in with the philosophy lessons is a plot rather more akin to normal teenage novels, in which Sophie interacts with her mother and her friend Joanna. This is not the focus of the story but simply serves to move the plot along. After the introduction to George Berkeley, the perspective of the novel shifts to the mysterious Hilde. Sophie and Alberto's entire world is revealed to be a literary construction by Albert Knag as a present for his daughter, Hilde, on her 15th birthday.

The novel continues with Hilde's story as a framing device for Sophie's story, but the stories intertwine as Hilde's understanding of philosophy grows alongside Sophie's understanding. As Albert Knag continues to meddle with Sophie's life, Alberto helps her fight back by teaching her everything he knows about philosophy. That, he explains, is the only way to understand her world. Meanwhile, Alberto's lessons allow Hilde to develop her own understanding of Sophie's world and use her knowledge against her father for exercising too much power over Sophie's world.

This is laced with events that appear to be scientifically impossible, such as Sophie seeing her reflection in a mirror wink at her with both eyes or actually seeing Socrates and Plato. Hilde's book (by her father) ends with Sophie and Alberto disappearing. Gaarder reveals that they have managed to escape Albert Knag's mind into Hilde's world as spirits.