Bink is a likable young man, with a rare handicap. His home is the North Village of Xanth, a land of magic, where everyone and everything has at least a minor magical capability; however, Bink has none. Although he has physical strength, Bink is treated badly by his peers and lacks self-esteem. He does have the affection of Sabrina, a beautiful girl he wants to marry, and the love of his parents, Roland and Bianca. As the story opens, Bink is near his home, watching a chameleon change its appearance and ultimately lose its life to a moth hawk, which foreshadows several events to come. After the chameleon is gone, Bink discusses his problem with Sabrina, who urges him to seek the advice of the Good Magician Humphrey. Although Bink is reluctant to seek Humphrey's help because the magician's price is one year of servitude, he relents, as his twenty-fifth birthday is only a month away. If he is unable to demonstrate a magical talent by then, Bink will be exiled from Xanth, the only home he has ever known.

On the long journey to Good Magician Humphrey, Bink overcomes many obstacles. He is bedeviled by some creatures and plants, but aided, protected or taught by others. Bink's first adversary is Chester, a mean centaur. Cherie, a friendly centaur, comes to his aid and helps Bink travel closer to Humphrey's castle. As they travel, she educates him about the violent history of how humans came to Xanth. She tells Bink that magic may not be as valuable as most people think it is. Before leaving him, Cherie also tells Bink about a centaur named Herman the Hermit who was banished from her herd for an act of obscenity, but refuses to elaborate further.

Bink's next obstacle is the Gap, a huge trench across Xanth that is filled with dragons and strange creatures. As night is falling, he agrees to stand in for a farmer at a rape trial in exchange for a night's shelter, before trying to cross the Gap. At the rape trial the next morning, both the charge and the victim are treated dismissively, but Bink has fulfilled the requirement and, when he leaves, is provided with the service of a gorgeous guide named Wynne. Wynne may be the woman who was raped, although he is not certain. Bink quickly realizes that, unfortunately, her intelligence leaves much to be desired. When a dragon appears from the Gap, he sends her away and ends up trapped in a cave in the Gap. Bink escapes the dragon by allowing a shade, named Donald, to possess him so that he can give the location of a silver tree to his impoverished wife and child, many miles distant. Bink is offered the wealth of the silver tree as a reward for helping Donald, but refuses the gift.

After traveling further, Bink falls into a sea and is saved by the Sorceress Iris, a mistress of illusion, who offers him anything to help her take Xanth's throne. Bink refuses and fights her illusions using the strength of his mind before escaping. As the journey continues Bink finds a badly wounded soldier, named Corporal Crombie, whom he saves using water from the Spring of Life. The Spring's water can heal any injury or illness and helps Bink to grow a finger that he lost in a childhood accident. He saves a little water to be used later. Crombie's magical talent is that he can discern danger from any direction and he becomes Bink's bodyguard and guide. When he senses danger ahead, he urges Bink to go toward it because he says danger must always be faced. They find Dee, a very average-looking girl, whom Bink immediately likes. Crombie tells Bink that she is the danger, but Bink insists that she is not. The men ask Dee to travel with them, as she is heading for Humphrey too. The travelers are forced to take shelter from a magical hailstorm in a tangler tree, but Crombie's opinion that all women are mean and manipulative, angers Dee. She goes off into the storm, with Bink and Crombie behind. They ask her to resume traveling with them, but she refuses. Crombie takes Bink close to the castle of Good Magician Humphrey and amiably leaves him.

Humphrey is unable to discover Bink's talent but insists that he does have one. He gives Bink a note to give to the King at his trial, attesting to this fact and providing safe passage through the forest so he can quickly return to the North Village. At Bink's trial in the North Village, the King disregards the note and refuses Bink's gift of water from the Spring of Life. Bink is exiled and passes through the magical Shield separating Xanth from Mundania. He misses his parents, but realizes that his relationship with Sabrina was superficial and that he is better off without her. Soon, soldiers attack him. They take him to Trent, an evil magician, who twenty years ago had tried to overthrow the King. Trent still wants the throne and has amassed an army to help him attain it, but he needs the location of the Shield to do it. He has developed a magical suppression elixir that will render the Shield harmless, and tries to threaten Bink into revealing the Shield's location. Bink resists, but a woman named Fanchon comes through the Shield from Xanth and appears before Trent. Fanchon is very ugly and very smart. When both are imprisoned in a pit, she tells Bink that she chose to leave Xanth because Humphrey told her that her ugliness, which is magical, might be reversed if she went to Mundania. She develops a plan to escape from Trent and steal the magical suppression elixir, but Bink, Fanchon, and Trent end up back in Xanth after a dramatic sea battle. If discovered, Bink and Trent will be executed and Fanchon is still ugly. To escape the wilderness, they join forces and declare a truce.

Bink, Trent, and Fanchon take shelter in Castle Roonga, where Fanchon reveals her identity as Chameleon, a woman who undergoes three drastic changes in appearance and intelligence level every month. She is average-looking Dee, beautiful, stupid Wynne, and ugly, smart Fanchon for a period each month. Her hope was to travel to Mundania, where she could revert to the average looks and intelligence of Dee forever. Fanchon also admits that she followed Bink because she knew his good nature, from having met him as both Dee and Wynne. Castle Roonga was once the stronghold of dead King Roonga, the Magician King of the Fourth Wave, a smart, just ruler. It maintains its own level of magic and protects itself with zombies and other mechanisms. After researching in Castle Roonga's library, Trent announces that Xanth must open its borders to Mundanians or perish because of its isolation. He feels the pull of the throne again but the characters agree that their best option for survival is to work together and maintain their truce until they approach civilization. Trent promises the Castle that he will return to it to rule Xanth with its help.

After leaving Castle Roonga, Chameleon, Bink and Trent come upon a great battle, involving all of the creatures of Xanth, united against a swarm of wiggles, which are the most dangerous creatures in Xanth. They meet Herman the Hermit, who confesses that his obscenity was to use magic, something forbidden among the centaurs. The battle ends when Bink is transformed into a fiery salamander to set the wiggle swarm on fire. He saves Chameleon from a fiery death, but ends up inside the ring of fire. Herman the Hermit saves him, but is gravely injured and asks for a quick death from Trent. Trent obliges, praising the centaur's courage.

At the edge of civilization, Bink and Chameleon agree to part company with Trent, but the Sorceress Iris appears. She coerces Trent into helping her take the throne. Bink is infuriated by Trent's decision and the men agree to a duel in the forest. As Bink battles Trent, the magician changes Chameleon into a winged doe, yet, he finds himself unable to transform Bink. Through the duel, Bink's magical talent is finally revealed: he cannot be harmed by magic. When his life is in true peril, Trent's most powerful transformation spells are useless against him. When Trent tries to kill him physically with a sword, Chameleon comes between the men and is gravely wounded. The Sorceress Iris urges Trent to kill them both, but he refuses, saying the he will not kill a man who has saved his life or the woman who loves him. He quickly changes Bink into a phoenix to fly off to Good Magician Humphrey for help in saving Chameleon.

Although Sorceress Iris hounds Bink on the way, he reaches Humphrey and they are soon en route to the North Village to obtain the help of Bink's father, Roland, a stunner. They also learn that the old King has died. When they return, Roland stuns Trent and Chameleon is healed. They all return to the North Village for Trent's trial. Trent is exonerated on the conditions that he marries the Sorceress Iris to control her and assume the throne. At the coronation, Bink again meets many of his old acquaintances. Trent appoints him as the Official Researcher of Xanth, but urges him to keep his magical talent private, as he explores the roots of Xanth's magic. Bink asks Chameleon to marry him, as the book closes.

The title of the book refers to Chameleon's quest for a spell that will allow her to have a single form, and therefore a stable identity. Her arrival in Bink's life is foreshadowed by his opening observations of the chameleon on the rock, which changes into a stingray beetle, stench puffer, fiery salamander and basilisk, before being killed and carried off by a moth hawk. The lizard's guises are a comparison to the woman, Chameleon, who can never have real happiness while she is constantly changing. Initially, Bink interprets the death of the lizard as an omen that his life will be in danger, but it is actually about how he saves Chameleon by giving her the "spell" of true, unconditional, love.