When five siblings—Cyril, Robert, Anthea, Jane, and their baby brother—move to a white house in the country, their dull routine is shattered by the discovery of a Psammead. This ancient, grumpy sand-fairy possesses the power to grant wishes, offering one per day. However, every wish comes with unexpected complications, teaching the children that magical shortcuts rarely lead to true satisfaction.
Their first wish for immense beauty turns them into radiant strangers, causing even their own baby brother and the household servants to reject them. Later, an attempt to gain boundless wealth fills the gravel pit with ancient gold, which proves impossible to spend and vanishes entirely at sunset. Subsequent wishes bring magical rainbow wings that lead to trouble with local farmers and an accidental burglary of a parsonage larder.
Further chaos ensues when a wish for a medieval castle plunges the children into a realistic siege, complete with invisible servants and an invisible dinner. A wish to be bigger than the local baker's boy turns Robert into a giant, resulting in a comical stint as a sideshow act at a village fair. Even a wish to grow up their baby brother into an adult results in a pompous young man who causes immense embarrassment.
Throughout these misadventures, the children learn valuable lessons about responsibility, sibling loyalty, and the perils of getting what you wish for. In the final crisis, when stolen jewels mysteriously appear in their mother's room, they use their last wishes to undo the chaos and protect their family, bidding a fond farewell to the sand-fairy who taught them such unforgettable lessons.