On the road to her stepfather, she find an insect. A big stick bug, which she's convinced is a fairy.. The fairy follows her to her new home. An old mill house in the forest, which is also the headquarters of the army and the captain. There is battles going on with the local gerilja, right up the mountain sides and the in the forest outside the area of the headquarters. But there's darker sides to the forest, than what you find on the battle field..
With the help of the fairy, Ofelia discovers an old, eerie looking labyrinth, on the premises of the old mill house. It takes her far down under ground, where she meets a faun.. He tells her she's the reborn princess Moanna of the underground world, but must prove her royalty by surviving three gruesome tasks. If she fails, she will never prove herself to be the the true princess and will never see her real father, the king, again.