New York City teenager Clary Fray begins seeing and drawing a strange symbol, worrying her mother Jocelyn Fray and family friend, Luke Garroway. At a crowded nightclub with her friend, Simon Lewis, Clary is the only one who can see Jace Wayland and his accomplices killing a man. The next day, two men, Emil Pangborn and Samuel Blackwell, arrive at the Fray apartment searching for a cup. Jocelyn calls Clary, frantically telling her to stay away and to warn Luke about someone named Valentine; she then drinks a potion putting her in a deep sleep. Returning home, Clary finds her mother missing and is attacked by a dog-like creature. Jace, a “Shadowhunter”, appears and kills it, explaining that it, like the “man” killed at the nightclub, was a demon in another form.
With help from the Frays’ neighbor, Madame Dorothea, a witch, Jace deduces that Pangborn and Blackwell seek a lost artifact called the Mortal Cup. Jace and Clary, along with Simon, go to Luke’s antique store. Pangborn and Blackwell are forcibly interrogating Luke who, to protect Clary and Jocelyn, falsely claims he cares nothing about the Frays and only wants the Mortal Cup. The trio escapes to the Shadowhunter Institute, a hidden cathedral-like building, where Jace treats Clary, who was stung by the demon. She and Simon meet two other Shadowhunters, siblings Alec and Isabelle Lightwood, and Shadowhunter leader, Hodge. Clary learns that Shadowhunters, invisible to mortals, are half-human, half-angel demon slayers. Clary has inherited her Shadowhunter mother’s powers, including drawing temporary magical runes on the skin. The Mortal Cup is one of three Mortal Instruments given to the first Shadowhunter by the Angel Raziel. Shadowhunters are either descended from other Shadowhunters or made by drinking from the cup. Hodge explains that Valentine Morgenstern, an ex-Shadowhunter who betrayed the order, now seeks the Cup to control both Shadowhunters and demons.
Hodge instructs Jace to take Clary to the City of Bones, a sanctuary beneath a cemetery. When the Silent Brothers attempt to unlock Clary’s blocked memories, they uncover a connection to Magnus Bane, the High Warlock of Brooklyn. At Bane’s club, he tells Clary that Jocelyn had him block knowledge of the Shadowhunter world from Clary’s mind. When Vampires kidnap Simon, Jace, Alec, Isabelle, and Clary trail them to their hideout. They find Simon, but vampires outnumber them. Werewolves intervene and save them.
As Simon recovers at the Institute, Clary notices two puncture marks on his shoulder, while he discovers he suddenly no longer needs eyeglasses. Clary shares a romantic evening with Jace, ending in a kiss. When Simon jealously confronts Clary about it, she downplays the incident, angering Jace. Simon confesses he loves Clary, though she does not reciprocate his feelings.
Clary realizes the Mortal Cup is hidden inside one of Madame Dorothea’s tarot cards that her mother painted as a gift. The group goes to Dorothea’s apartment, but a demon has replaced her. Simon and Jace kill it, but Alec is lethally stung. Clary retrieves the Mortal Cup card, and they return to the institute. Hodge summons Magnus Bane to heal Alec.
Clary removes the Mortal Cup from the card and gives it to Hodge, who betrays them by summoning Valentine Morgenstern through a portal and giving him the Cup. When Valentine reveals he is Clary’s father, she refuses to join him. She puts the cup back into the card, then escapes through the portal that transports her to Luke’s store. Luke, revealed to be the werewolf who helped fight the vampires, confirms that Valentine is her father and says Clary had an older brother named Jonathan, who died as a toddler. Luke and his werewolf pack go to the Institute with Clary to battle Valentine after he summons demons through a roof opening. Simon finds Jocelyn, still unconscious, at the Institute, and he and Isabelle close the roof opening with help from a repentant Hodge.
Clary and Jace fight Valentine, who lies by claiming Jace is his son. Clary tricks Valentine by giving him a replica Mortal Cup, then pushes him into the portal, destroying it. Jocelyn is rescued but remains unresponsive at the hospital. Clary uses her new-found powers to repair the apartment. Jace arrives, confessing he needs her and disbelieves they are siblings and will uncover the truth. Realizing she belongs in the Shadowhunter world, Clary returns to the Institute with Jace.