Hands made of needles re-make a doll to resemble an 11-year-old girl. A little later, Coraline Jones and her family move from Michigan to the Pink Palace Apartments in Oregon, which is also occupied by retired actresses Spink and Forcible, and eccentric Russian acrobat Mr. Bobinsky, who claims to be training a mouse circus.
Coraline decides to explore their new home, meeting Wyborn "Wybie" Lovat, the grandson of the apartments' landlady, Mrs. Lovat. While exploring, she finds a brick-sealed door. That night, Coraline follows a mouse to the door, where she discovers 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. Coraline falls asleep in the Other World, but awakens back home.
She goes to the other world three times despite warnings from friends and a cat that can talk in the other world. The other copies include a copy of Mr. Bobinsky, copies of Ms. Spink and Forcible, and a duplicate of Wybie that cannot talk. At a certain point her other mother asks if she can have buttons sewn on her eyes, and Coraline rejects the offer. After she refuses to accept the Other Mother's love, Coraline is thrown into a mirror that hides a room. From this point she meets the ghosts of 3 children who were in the same situation she was in: The only difference was that they stayed forever, but eventually they were locked in and the Other mother ate their souls. Coraline vows to free them by finding their stolen eyes. The Other Wybie helps her escape, but when Coraline returns, her parents are nowhere to be found. The cat reveals they have been kidnapped.
Coraline ventures into the Other world to play a "game". Winning means she and her parents are set free; the cost of losing is staying forever. She manages to retrieve the ghost children's stolen eyes and appears to 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 she will never be let go. Coraline manages to escape, and her parents return with no memory of being kidnapped.
The ghosts appear to Coraline to warn 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. With Wybie's help, Coraline throws the key down a well. Mrs. Lovat's sister is revealed to be one of the three children. A bit later she meets Mrs. Lovat, and prepares to tell her about the Other World. Coraline contents with her new life, and near the end of the film the cat walks into a sign and vanishes.