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When Jacob Portman (we hope he introduces us to cousin Natalie) is young, he idolizes his Grandpa Abe, a man who was raised in an orphanage, fought in wars, and even performed in the circus. Grandpa Abe tells Jacob fantastic stories and shows him photos of peculiar children—invisible boys, strong girls, and people with mouths in the back of their heads. Jacob believes these tall tales until he gets old enough not to. Just as kids stop believing in Santa Claus and the Easter Bunny, Jacob stops believing in Grandpa's peculiar childhood.
When Jacob is fifteen, his grandfather starts ranting and raving about monsters coming to get him. Jacob and his dad write it off as dementia. Big mistake: When Jacob goes to check on his grandfather, he finds him dead… and he comes face to face—well, face to tentacle—with the monster that killed him. Jacob's grandfather dies in Jacob's arms, but not before uttering the most cryptic last words since "Rosebud."
No one believes that a monster killed Grandpa. (Official cause of death: rabid dogs.) Jacob starts having nightmares and slips into a deep depression. His psychiatrist, Dr. Golan, suggests he go to the island where Grandpa was raised, and maybe find the explanation behind his mysterious dying words.
Jacob and his dad fly to Cairnholm Island, in Wales, and Jacob finds Miss Peregrine's home way out past the island's bogs. Snooping around the decaying estate, Jacob finds a cache of old photos like the ones Grandpa had. Maybe the tales were true?
Jacob realizes that they're definitely true when he gets caught snooping by a girl who can generate fire with her bare hands. This girl and her friends run when they see Jacob, but he chases them. They turn out to be Emma Bloom, firestarter, and Millard Nullings, an invisible boy. They lead Jacob on a chase through a cairn, which turns out to be a portal into the past, which takes Jacob to September 3, 1940, the day before Miss Peregrine's home was destroyed by a bomb dropped during World War II. The house is restored, and it's full of peculiar children.
By peculiar, we mean kids with superpowers or strange deformities.
Grandpa Abe was raised here, but Miss Peregrine (who can turn into a peregrine) tells Jacob that he left to fight the hollowgast, the evil monsters that hunt the peculiars, and the same type of monster who killed Grandpa Abe. To stay safe from the hollowgast, Miss Peregrine created the time loop. They repeat the same day every day, and the bomb that falls on the house never explodes.
As Jacob starts to fall in love with Emma, his grandfather's ex-girlfriend who still looks sixteen thanks to the time loop, he learns that there are groups of bad peculiars trying to gain immortality. When their big experiment failed, they became the hollowgast. With the help of wights—monsters who look human—the hollowgast roam around and eat peculiars. Only Jacob can see them.
The hollowgast launch a plot to kidnap Miss Peregrine and other ymbrynes—shape-shifting women who can control time—to try the immortality thing again. Jacob's psychiatrist, Dr. Golan, turns out to be a wight, and Jacob leads him right to Miss Peregrine. Golan birdnaps Peregrine and her mentor, Miss Avocet, and carries them out to sea.
Jacob and his new peculiar friends give chase, kill Golan and the hollowgast, and rescue Miss Peregrine. Miss Avocet is taken away, and Miss Peregrine is stuck in bird form. Because she can't change back, the time loop collapses, the bomb falls, and the home is destroyed.
Even though he knows he can never return to the real world if he stays, Jacob decides to stay in the past and accompany Emma to find Miss Avocet and change Miss Peregrine back to normal. He says goodbye to his father, returns to 1940, and paddles away in a boat to destinations unknown.