The Floating Island by Elizabeth Haydon is a coming of age story of Ven Polypheme, a dwarf-like creature whose desire for adventure leads him on a journey that shows him not only adventure, but also leads him to discover friendship, and the real meaning of home. Through his journey, Ven is able to find his place in the world, and help those he loves.

At the beginning of the novel, Ven Polypheme sets out to do his first inspection of a ship as part of his father's business. The ship is attacked by pirates, however, and in trying to save the ship and its crew, Ven sets fire to the pirate ship and his own ship. Knocked unconscious, he wakes on a floating piece of debris, being helped by a mermaid, Amariel. Amariel is a kind creature, and she helps Ven survive long enough to be rescued by Captain Oliver Snodgrass. On board, Ven is treated well, and helped by a young chef apprentice, Char. Oliver takes Ven to a hidden world called the "Floating Island", where he takes a vial of Living Water and exchanges it with some very rare water of the world. Mr. Whiting, a man on the ship, is furious as he wanted to go instead. The Floating Island a perfectly balanced magical place, where voices spoken carry on the wind. Ven sends message to his family, alerting them he is safe. Oliver then takes Ven to Serendair, where he instructs him to go to the Crossroads Inn, but only to travel there during the day. Char and Ven arrive at the Inn only to discover it is run by Oliver's wife and that she is healed from heartbreak through the Living Water. The crossroads is an eerie place, and at night people traveling the roads are often killed by the mysterious evil forces surrounding the area, and those left alive hear wolves and horrible sounds of death.

Soon after arriving, Ven, Char, and a girl they have met named Ida are arrested, as Whiting has claimed Ven stole a ring and killed a man. On being taken to the king, however, Ven is declared innocent. The king asks him to be his reporter, traveling the world to find magical places. Ven offers to think about it, but on returning to the Inn, Char and Ven rescue a young boy from the crossroads and discover that the wolves heard in the mist are merely Whiting's dogs. When they hide, they learn from the ghost of the Snodgrass' son that the area really is plagued by an evil presence.

Ven and his friends, including Char, Ida, Clemency and Saeli, find and dig up the ancient evil, but when Ida uses her thieving skills to close a casket, she accidentally inhales its essence, becoming a Revenant. The group heads to the ocean, helped by Amariel, where Ven calls the floating island. He uses the Living Water to heal Ida, and she replaces it with her tears. The group travels safely back to the Inn to find it healed. Ven, upon receiving a letter from his father forgiving him and reminding him to make his own place in the world, takes the king up on his offer and becomes the king's reporter.