Mabel, a young girl, lives with her father Raymond, mother Penny, and newborn sister Isobel in poverty, much to the disappointment of Raymond’s more affluent relatives. One night, after getting drunk and wandering into the forest, Raymond stumbles upon a sedan chair carrying the mysterious architect Mr. Van Schoonbeek, who beckons Raymond inside.
Raymond returns home, rambling to his wife Penny about his encounter before falling asleep. The next day, Van Schoonbeek’s employee Mr Thomas visits the family and informs them that the architect has agreed to build a house for the family if they vacate their current home. Raymond and Penny sign the agreement and the family moves in just as the workers are finishing construction.
The house is immediately peculiar: workers are seen refitting the house, but when approached by Mabel, they only stare at her vacantly without speaking; extravagant food is provided in the dining hall, but with no sign to who might be cooking or serving it; electric lights seem to hypnotize Raymond and Penny. That night, as Mabel and Isobel go to bed, Raymond and Penny find themselves fascinated by a fireplace and sewing machine in the house’s withdrawing room, remaining there for hours on end without thinking of their daughters. Raymond is left baffled by the fact that he can’t start a fire, while an unseen Van Shoonbeek laughs at his frustrations.
The next morning, Mabel discovers that the workers have built a new room outside her window and removed the stairs, forcing them to descend via a ladder in the billiard room. She also sees Thomas acting nervously before informing her that Van Schoonbeek is making adjustments to the house; in the distance, his workers can be seen tearing down the family’s old home. Soon after, Van Schoonbeek delivers new outfits to Raymond and Penny made out of couch cushions and curtains. The parents adore the outfits, though Mabel considers them strange. That night, Mabel and Isobel explore the house and enters the basement, eventually discovering their old home preserved underneath the house; finding the old house more comfortable, the two of them remain there for a time, but when hunger eventually forces them to leave, they find themselves lost in the maze of seemingly-identical passageways. Meanwhile, as Penny mindlessly sews new curtains, Raymond kneels before the fireplace and – at the prompting of Mr Thomas – finally succeeds in lighting a fire by burning the family’s old possessions, including Mabel’s old dollhouse.