Conradin is a ten-year-old boy living in early 20th-century England, who is supposedly so sickly that the doctor predicts he won’t live another five years (although most people don’t count the doctor’s opinion for much, with the exception of Conradin’s guardian Mrs. De Ropp). Mrs. De Ropp is Conradin’s older cousin, and to him she represents everything in the world that is real and necessary but unpleasant. Ostensibly, Mrs. De Ropp is with Conradin in order to care for him, but she frequently forces him to do things he dislikes. While this is supposedly for his own good, she seems to enjoy denying Conradin what he wants, and as a result, Conradin is lonely and frequently uses his active imagination in an attempt to escape his circumstances.
Conradin spends most of his time in a dull garden overlooked by windows of the house, where Mrs. De Ropp is always watching him, ready to open a window and yell if she catches him doing something he shouldn’t. For Conradin, by far the most interesting part of the garden is an abandoned toolshed. Inside the toolshed, where Mrs. De Ropp can’t see him, Conradin lets his active imagination run wild. He fills the toolshed with “phantoms,” some based on history and others that he invents on his own.
There are also two living residents of the toolshed. One is a ragged looking Houdan hen (a French breed of chicken with some combination of black and white feathers), which Conradin takes a liking to. The other is a large polecat-ferret, which lives in a large hutch (or cage) and which a local butcher boy helped Conradin smuggle into the shed in exchange for some silver that Conradin had hoarded over time. Conradin is afraid of the sharp-fanged polecat-ferret, but it’s also his most valued possession. He keeps it a secret from Mrs. De Ropp and gives it a name that one day miraculously came to him: Sredni Vashtar, the great ferret. Conradin invents a pagan-style religion to worship the ferret, with exotic rituals that contrast with the more mundane rituals Conradin observes every week when his cousin takes him to church.
Eventually, Mrs. De Ropp notices how much time Conradin is spending in the toolshed. She decides it can’t be good for him, so one morning at breakfast she announces that the Houdan hen was sold and taken away overnight. She expects—perhaps even hopes—that this will make Conradin sad or angry, and she’s already prepared her answers to his complaints. But Conradin just goes pale and says nothing. That afternoon, Mrs. De Ropp puts toast on the table (a delicacy she usually denies him on the grounds that it’s bad for his health and too much trouble for her to make), but Conradin doesn’t take any of it.
That evening Conradin prays to his ferret god, Sredni Vashtar, asking for a favor. He doesn’t say aloud what he’d like; instead he asks Sredni Vashtar to “do one thing for me,” since, in his imagination, Sredni Vashtar is a god and should know what that one thing is. Conradin repeats variations on this prayer throughout the next few days, both in the woodshed and at night in his dark bedroom. Mrs. De Ropp notices that his visits to the toolshed haven’t stopped, so one day she goes in the shed to investigate.
Inside the shed, Mrs. De Ropp finds the hutch where Sredni Vashtar lives, but she doesn’t see Sredni Vashtar and believes that the hutch may contain guinea pigs. She tells Conradin she is going to get rid of them and searches his room, finding a key to the hutch that he had hidden. She goes back to the shed, while Conradin stays inside the house and watches her through the window.
As Conradin watches from the window, he imagines his cousin in the shed, peering down into Sredni Vashtar’s straw with her short-sighted eyes and being surprised by what she finds. He repeats his prayer for Sredni Vashtar, but he fears the worst—that Mrs. De Ropp will come out of the shed with a pinched smile on her face and that later the gardner will carry Sredni Vashtar away. But after several minutes, the door of the shed is still ajar. Conradin waits, beginning to feel triumphant as under his breath he repeats a battle chant he made up about Sredni Vashtar conquering his enemies.
Then, out of the shed comes Sredni Vashtar, with blood stains on his jaw and throat. The ferret walks down to a brook in the lower part of the garden, takes a drink, then disappears into some bushes. Just then a maid asks Conradin where his cousin is. He responds that his cousin went to the shed some time ago, so the maid goes to check.
Conradin begins to toast himself some bread, drawing the process out and using a lot of butter. There is chaos throughout the house as the servants discover Mrs. De Ropp’s body in the shed and bring it into the house. While the voices of the servants argue what to do next, Conradin makes himself a second piece of toast.