In 1960, 10-year-old Arthur Montgomery lives with his grandmother Daisy in a quiet farm house on a dirt road, in a small rural community in Northeastern Connecticut (based on Sterling). His grandfather Archibald has recently gone missing and he sees little of his parents (who are away looking for work). Daisy entertains Arthur with stories of his grandfather's adventures in Africa, featuring the tall Bogo Matassalai and the minuscule Minimoys, of whom the latter now live in Archibald's garden, protecting a collection of rubies. Arthur becomes enamoured of a picture of Selenia, the princess of the Minimoys. When Daisy receives a two-day deadline to pay a large sum of money to a building developer named Ernest Davido, who plans to evict the two, Arthur looks for the rubies to pay off the debt and discovers various clues left by his grandfather. He is met in the garden by the Bogo Matassalai, who reduce Arthur to Minimoy size. From the Minimoys, Arthur learns that they are in danger from Maltazard, a Minimoy war hero who now rules the nearby 'Necropolis', after corruption by a weevil, by whom he has a son named Darkos.Arthur, reflecting his legendary British namesake, draws a sacred sword from its recess and uses it to protect the Minimoys from Maltazard's soldiers; whereupon Sifrat, the ruler of the Minimoys, sends Arthur to Necropolis, with the princess Selenia and her brother Betameche. En route, they are attacked on two occasions by Maltazard's soldiers. In Necropolis, Selenia kisses Arthur, marking him as her husband and potential successor, and confronts Maltazard alone. When Maltazard learns that she has already kissed Arthur and thus can no longer give him her powers and cure his corruption, he imprisons all three, who discover a Minimoy form of Archibald. Thereafter Arthur and his grandfather escape and return to human form, with little time to spare before Maltazard's flood reaches the Minimoys. With the help of Mino, a royal advisor's long-lost son, Arthur redirects the flood to Necropolis, whereupon Maltazard abandons Necropolis and his son, and the water ejects the rubies above ground. Archibald pays Davido with one ruby; and when he tries to take them all, the Bogo Matassalai capture him and give him to the authorities (scene deleted in the U.S. edition). Arthur asks Selenia to wait for his return, and her agreement to do so while the film ends.