Wolf-Alice is a girl who was raised by wolves. She cannot speak, she runs on all fours and howls, and the only thing human about her is “that she is not a wolf.” Some nuns find her in a wolf’s den, next to her “foster mother,” who has been shot. They take her back to their monastery and try to teach her to act like a “civilized” human, but she remains wild and untameable.
This story is not based on a specific fairy tale but on many disparate legends of feral children raised by wolves. In this way Wolf-Alice is another kind of “beast” or metamorphic creature, part human and part wolf. The nuns are closer to the “clockwork maid” on the spectrum of wildness and civilization, and so they fear Wolf-Alice.
After nine days the nuns give up and hand Wolf-Alice over to the Duke, an old werewolf who lives in a nearby mansion. He is a monster who does not appear in mirrors and cannot die, and every night he wakes up filled with ravenous hunger. He wanders around in the moonlight, hunting humans, or if everyone’s doors are locked he digs up graves and eats the bodies.
The Duke is another kind of half-wolf, half-human, but otherwise he and Wolf-Alice are almost opposites. Wolf-Alice’s wolfness is the innocence of a wild animal, while the Duke has an especially human brutality about him, even though he is the one with actual fur.
Wolf-Alice moves into the Duke’s mansion and sleeps in the ashes of the fireplace instead of a bed. She learns to sweep up the remains of the Duke’s victims when he is away. She is more truly wolf-like than the Duke, for he eats his own kind and would be scorned by the pack. Wolf-Alice grows older in this horrible environment, and one day she gets her first menstrual blood.
The Duke is another bestial man-monster exploiting his power. Alice also exists on that metamorphic threshold, but she begins to develop her humanity on her own, in the “bloody chamber” of the Duke’s mansion and the “bloody chamber” of her body, as she becomes a woman.
Wolf-Alice is confused by this, and she searches the house for sheets to clean herself with. Then she comes across a mirror, which intrigues her, as she thinks there is another pale “not-wolf” trapped inside of it, mimicking her. Time passes, and a month later Wolf-Alice menstruates again. She begins to develop a sense of time from these cycles, as she and the Duke inhabit “separate solitudes” in the house.
The mirror returns as an important image – the Duke does not appear because of his monstrous nature, but Wolf-Alice is able to see herself in it as something distinctly not-wolf. Carter associates Wolf-Alice's menstruation with the development of her humanity – a time of both blood and enlightenment.
Wolf-Alice finds an old ball dress and enjoys wrapping herself in it and looking in the mirror. She starts to realize that the mirror is a reflection of herself, like the shadows she and “the rest of the litter” used to play with. She washes the dress and then figures out how to put it on. She wanders out of the house, finally feeling different from a wolf.
Unlike many of the other characters, Alice undergoes her metamorphosis without the aid or encouragement of another. She discovers her sexuality and humanity not for the sake of another’s love, but on her own.
Meanwhile a young man from town has been plotting to kill the Duke, who murdered his bride. The young man and some other townspeople are gathered in a church with an arsenal of silver bullets and holy water. Wolf-Alice hears them and approaches the church, and then she smells the Duke nearby. The young man comes out of the church and shoots the Duke in the shoulder, knocking off part of his wolf-pelt, and the Duke limps away. Wolf-Alice follows, frightened of the bullets. The church people think she is a ghost taking vengeance on the Duke.
The young man is another peripheral character, as the heroines of the earlier stories had been already married before being kidnapped by beasts. The Duke is shot mid-transformation, so he is truly trapped on the threshold between man and monster now, unable to shift between masks. Alice puts on an old white dress like the first heroine or the vampire Countess.
Back in his room the Duke lies on his bed, writhing in pain and caught mid-transformation, neither wholly human nor wholly beast. Wolf-Alice watches him, and then she approaches and licks his bloody face. The mirror across the bed at first shows only Wolf-Alice, but as she licks him the face of the Duke begins to appear there too.
Wolf-Alice now takes on the role of the tiger or the British soldier, transforming another through a kiss (or lick). The Duke becomes human (appears in the mirror) through the human compassion of Wolf-Alice, but this compassion means that Wolf-Alice is becoming a human too. Carter ends the book with another lyrical transformation, this one not emphasizing dark sexuality but only hope in a place of despair.