In 1960, 10-year-old protagonist Arthur is living with his grandmother in a quiet country house. His grandfather Archibald has recently gone missing and he sees little of his parents. His grandmother entertains him by reading stories to him of his grandfather's adventures in Africa. One of these stories is about the friendship of the tall, Maasai-like tribe called the Bogo Matassalai with the Minimoys — tooth-sized, elfin beings they believe to be their counterparts. After Archibald had helped the Bogo Matassalai, says the story, they and the Minimoys had given him a large amount of rubies in a show of thanks for helping them. After returning home, Archibald brought the Minimoys with him and lent them his garden as their home. According to the story, he gave the Minimoys the rubies to look after them until he needed them. Arthur has become enamoured of a picture of Selenia, the princess of the Minimoys.
It's shown that Arthur's grandmother has been given a two-day deadline to pay a large sum of money to a building developer named Davido, who has bought her mortgage from the bank and plans to evict the two. Arthur therefore decides to find the rubies in order to pay off the debt. After stumbling across various clues written by his grandfather, Arthur finds the key to the Minimoys' world. He accidentally puts his grandmother into a deep sleep by dropping sleeping drops into her water and as she begins to snore, he continues. He is met in the garden by the "Bogo Matassalai", who show Arthur how to get into the Minimoys' world by shrinking down to their size and becoming a Minimoy himself. This is done by means of a telescope and the power of a shining full moon. When Arthur is underground with the Minimoys, he learns of a danger to the little people's future, posed by the plans of Maltazard, the leader of an army of mosquito-riding rebels named 'Seides' living in nearby "Necropolis", who plan to conquer the Minimoys by flooding their city. Maltazard is said to have been a Minimoy war hero corrupted by a seductive weevil, by whom he has a son called Darkos. After his corruption, Malthazar became a warlord known as the "Evil M", keeping Archibald as his prisoner and the rubies as his throne.