The story begins with Farid working for Orpheus, in hopes of him reading Dustfinger back to life, and Meggie and her parents living with the Black Prince and his gang of robbers. However, the key to bringing Dustfinger back is communicating with the White Women themselves, and so far Orpheus does not have any knowledge as to how to meet them. Knowing that Mo has the power to summon up the White Women, Orpheus offers him the return trip to the real world his wife and daughter, and demands a meeting with the White Women. Mo accepts, not knowing that Orpheus intends to offer him to the White Women in exchange for Dustfinger. At the graveyard of the strolling players, Mo summons the White Women, as planned, but they take him to the world of the dead, without bringing Dustfinger back. The gang of robbers immediately accuse Orpheus of treachery, but he denies it and grudgingly trudges away, gloomy without any prospect of Dustfinger. In the world of the dead, Mo meets Death itself, and Death bargains with Mo. Because he had bound the Adderhead a book of immortality, Death could not take him. Death offers Mo and Dustfinger on the condition that Adderhead is brought to Death by the end of winter, but if they should fail, Death will take back Dustfinger, Mo, and he/she will also take Meggie, as an added incentive.
Mo and Dustfinger return from Death, and everyone rejoices. Upon hearing this news, Orpheus calls Farid to him, who hasn't heard yet, and locks him up in the cellar, afraid of him running away to Dustfinger. Dustfinger comes to rescue him, taking the book Inkheart with him. Somehow, back in the real world, Elinor persuaded Darius to read them to the Inkworld, and they rejoin the robbers. However, Elinor proves to be more of a bother than help, and constantly argues with Fenoglio while he was concentrated in writing the future for the Inkworld. Afterwards, the Adderhead orders his henchmen to plunder the villages. The peasants' only defense is a band of robbers led by the Black Prince. The Adderhead's daughter Violante offers the Bluejay her alliance, and Mo, seeing no other solution to killing the Adderhead, accepts. Meanwhile, Mortola, under the disguise of a magpie, visits the robber's den, where they hid the children, and makes several attempts to kill the Black Prince and Meggie, but all without success.
Fenoglio discovers his talent of writing had returned to him when he wrote roots to save the Black Prince from Death when Mortola poisons him. Mortola offers Orpheus her alliance with a demand of bringing her son, Capricorn, back from the dead. Mo, under the alliance of Violante, march to the castle gates, and gives himself in for the return of all the children of Ombra. Violente helps him escape and takes him, and Dustfinger, to her mother's castle, the Castle of the Lake, with the intention of completely disabling the Adderhead's men when they arrive. After being revealed their presence, the band of robbers and the children move to a forest to hide in "human nests". The Milksop and his men eventually find them, however, and attack. Fenoglio again unveils his talent of writing when he summons up a giant (who captures the Black Prince and Fenoglio) with the help of Meggie. At the castle, the Adderhead's men followed a passage not known by Violente, and her child soldiers get slaughtered, Mo and Violante captured, and Dustfinger presumably killed by Orpheus's Night-Mare, Basta. Resa (who is now pregnant) leaves the robbers, shape-shifts into a swift, and flies to the castle in hopes of saving Mo, and the three of them wander the castle in search of the White Book. When none has turned up, Dustfinger offers to go looks for it, only to stumble upon Orpheus, who says that Brianna, Dustfinger's daughter, is being held captive by Orpheus' Night Mare, and will be killed if Dustfinger doesn't lead a trail of fire to Mo's location. After consulting with Mo, Dustfinger does lead the trail of fire, and goes to rescue his daughter, extinguishing Basta with flame. Under the Piper's supervision, Mo works on a new White Book, to replace the Adderhead's, as slowly as possible, for it is plain that the book should never be finished. The Adderhead's grandson, Jacopo, steals the White Book and secretly hands it to Mo. While Jacopo distracts the Piper, Mo writes in the three words, "HEART"," SPELL," and "DEATH."
The Adderhead is taken by the White Women, Dustfinger flares up the remaining guards not routing, and they all return to the robbers' hideout. Orpheus escapes to the freezing mountains on the other side of the country. The children are released back to their parents, and Violante rules over the entire country. Meggie, destined with Fenoglio's writing, falls deeply in love with a boy named Doria, and when asked by Farid, her former love, to join him to wander the villages like Dustfinger, refuses. It is later revealed that Resa gives birth to a boy. The last chapter of the book is told in third-person perspective of Meggie's little brother, who likes hearing his sister's stories of the Real World and reveals a wish to travel there someday.