In 1871, 19-year-old Alice Kingsleigh is troubled by strange recurring dreams, mourning the death of her father, and fighting the stifling expectations of the society in which she lives. She receives an unwanted marriage proposal from Hamish Ascot at his father's garden party, where she spots a familiar white rabbit wearing a waistcoat and carrying a pocket watch. She follows it down a rabbit hole and shrinks after drinking from a bottle labeled 'Drink Me' (called Pishsalver), allowing her to enter the forest of a fantastical place called Underland. There she is greeted by the White Rabbit, a Dormouse, a Dodo, Talking Flowers, and identical twins Tweedledum and Tweedledee, who all apparently know her.

Alice asserts that she is dreaming, but learns from Absolem the Caterpillar that she is destined to slay the Jabberwocky and end the tyranny of the Red Queen. The group is ambushed by the ravenous Bandersnatch and the Red Queen's knights, led by the Knave of Hearts. All are captured except Alice, who escapes, and the Dormouse, who takes one of the Bandersnatch's eyes. The Knave informs the Red Queen of Alice's return and he is ordered to find her immediately.

The Cheshire Cat guides Alice to the Mad Hatter, the March Hare, and the Dormouse's tea party. The Hatter explains that the Red Queen took over Underland, usurping her sister the White Queen, and that he joined the resistance after she destroyed his village and killed his family. The red knights seize the party and the Hatter saves Alice from capture by allowing himself to be seized. Alice is found by the Knave's Bloodhound who is allied with the resistance, who takes Alice to the Red Queen's castle, where she grows taller after eating a cake labeled 'Eat Me' (called Upelkuchen), infiltrating the castle as a courtier named "Um".

Alice learns that the vorpal sword, the only weapon capable of killing the Jabberwocky, is locked inside the Bandersnatch's den. She rebuffs advances from the Knave, leading the jealous Red Queen to demand her beheading. Alice obtains the sword and returns the Bandersnatch's eye, who gratefully helps her escape the castle and delivers her to the White Queen, who gives Alice a potion that returns her normal size. The Cheshire Cat uses his shapeshifting powers to save the Mad Hatter, who incites rebellion amongst the Queen's subjects before escaping. Absolem finally gets Alice to realize Underland is real, evoking memories of her visit when she was a little girl and called it "Wonderland", and advises her to fight the Jabberwocky just before completing his transformation into a pupa.