Paul Jonas has passed from the Ice Age into something much different. At first, seeing familiar London sights, he believes he has finally found his way home, but soon comes to realize that he is instead traveling through an England almost completely destroyed by Martian attack—it is, in fact, the setting of H. G. Wells' War of the Worlds. Paul now realizes that he is traveling not just to worlds separate in time and space, but to some that are actually fictitious. He meets a strange husband and wife called the Pankies, who seem to be another guise of his pursuers Finch and Mullet, but offer him no harm. (Paul is also being pursued by a special software program called the Nemesis device, but he is not yet aware of it.) Then, when Paul and the Pankies stop at Hampton Court, Paul is led into the maze by a strange man and then shoved through a gateway of glowing light at the maze's center.

On the other side Paul finds himself in the setting of Coleridge's famous poem, Xanadu, and the man who brought him there introduces himself as Nandi Paradivash. Nandi is a member of a group named The Circle, who are working against the Grail Brotherhood. Paul finally learns that he is not insane, nor caught in some kind of dimensional warp, but is rather a prisoner in an incredibly realistic simulation network. But Nandi has no idea why the Brotherhood should be interested enough in Paul—who worked in a museum and remembers his other life as being very ordinary—to pursue him throughout Otherland. Nandi also reveals that all the simulations through which Paul has been traveling belong to one man—Felix Jongleur, the Grail Brotherhood's chairman. Before Nandi can tell him more, they are forced to separate, Nandi pursued by Kublai Khan's troops, Paul passing through another gateway into yet another simworld.

Things are no less complex and confusing in the real world. Renie's and !Xabbu's physical bodies are in special virtual reality tanks in an abandoned South African military base, watched over by Jeremiah Dako and Renie's father, Long Joseph Sulaweyo. Long Joseph, bored and depressed, sneaks out of the base to go see Renie's brother Stephen, who remains comatose in a Durban hospital, leaving Jeremiah alone inside the base. But when Joseph arrives at the hospital, he is kidnapped at gunpoint and forced into a car.

The mysterious Mr. Sellars lives on a military base, too, but his is in America. Christabel Sorensen is a little girl whose father is in charge of base security, and who despite her youth has helped her friend Sellars escape the house arrest her father and others have kept him in for years. Sellars is hiding in old tunnels under the base, his only companion the street urchin Cho-Cho. Christabel does not like the boy at all. She worries for the feeble Mr. Sellars' safety, and is torn by guilt for doing something she knows would make her mother and father angry. But when her mother discovers her talking with Sellars through specially modified sunglasses, Christabel is finally in real trouble.

Martine, Florimel, Quan Li, Sweet William, and T4b have been enjoying the flying world, Aerodromia, but things get uncomfortable when a young girl from the tribe is kidnapped. Martine and the rest don't know it, but the girl has been stolen, terrorized, and murdered by Dread, still pretending to be one of Martine's four companions. The people of Aerodromia blame the newcomers for the disappearance, and dump them all into a labyrinth of caverns they call the Place of the Lost, where they find themselves surrounded by mysterious, ghostly presences which Martine, with her heightened nonvisual senses, finds particularly upsetting. The phantoms speak in unison, telling of the "One who is Other," and how he has deserted them instead of taking them across the "White Ocean," as promised. The voices also identify the real names of all Martine's company. The group is fascinated and frightened, and only belatedly realizes that Sweet William has disappeared—evidently to protect the guilty secret of his true identity. Something large and strange—the Other—abruptly enters the darkened Place of the Lost, and Martine and the others flee the horrifying presence. Martine searches desperately for one of the gateways that will allow them to leave the simulation before either the Other or the renegade Sweet William catches them.

At the same time, Orlando and Fredericks discover that the Egyptian simulation is not a straightforward historical recreation, but a mythical version. They meet a wolf-headed god named Upaut, who tells them how he and the whole simworld have been mistreated by the chief god, Osiris. Unfortunately, Upaut is not a very bright or stable god, and he interprets Orlando mumbling in his sleep—the result of a dream-conversation Orlando is having with his software agent, Beezle Bug, who can only reach him from the real world when he dreams—as a divine directive for him to try to overthrow Osiris. Upaut steals their sword and boat, leaving Orlando and Fredericks stranded in the desert. After many days of hiking along the Nile, they come upon a strange temple filled with some terrible, compelling presence. They cannot escape it. In a dream, Orlando is visited by the mystery woman also seen by Paul Jonas, and she tells them she will give them assistance, but as the temple draws them closer and closer, they find only the Wicked Tribe, a group of very young children they had met outside the network, who wear the sim-forms of tiny yellow flying monkeys. Orlando is stunned that this is the help the mystery woman has brought them. The frightening temple continues to draw them nearer.

Paul Jonas has passed from Xanadu to late 16th Century Venice, and soon stumbles into Gally, a boy he had met in one of the earlier simulations, and who had traveled with him, but Gally does not remember Paul. Seeking help, the boy brings him to a woman named Eleanora; although she cannot explain Gally's missing memories, she reveals that she herself is the former real-world mistress of an organized crime figure who built her this virtual Venice as a gift. Her lover was a member of the Grail Brotherhood, but died too soon to benefit from the immortality machinery they are building, and survives now only as a set of flawed life-recordings. Before Paul can learn more, he discovers that the dreadful Finch and Mullet—the Twins, as Nandi named them—have tracked him to Venice: he must flee again, this time with Gally. But before they can reach the gateway that will allow them to escape, they are caught by the Twins. The Pankies also make an appearance, and for a moment the two mirror-pairs face each other, but the Pankies quickly depart, leaving Paul alone to fight the Twins. Gally is killed, and Paul barely escapes with his life. Still trying to fulfill the mystery woman's summons from his Ice Age dream, he travels to a simulation of ancient Ithaca to meet someone called "the weaver." Still shocked and saddened by Gally's death, he learns that in this new simulation he is the famous Greek hero Odysseus, and that the weaver is the hero's wife, Penelope—the mystery woman, again. But at least it seems he will finally get some answers.

Renie and !Xabbu and Emily find that they have escaped Kansas for something much more confusing—a world that does not seem entirely finished, a place with no sun, moon, or weather. They have also inadvertently taken an object from Azador that looks like an ordinary cigarette lighter, but is in fact an access device, a sort of key to the Otherland network, stolen from one of the Grail Brotherhood (General Daniel Yacoubian, one of Jongleur's rivals for leadership). While studying the device in the hopes of making it work, !Xabbu manages to open a transmission channel and discovers Martine on the other end, trapped in the Place of the Lost and desperately trying to open a gateway. Together they manage to create a passage for Martine and her party, but when they arrive, believing they are being pursued by a murderous Sweet William, they find that it is William himself who has been fatally injured, and grandmotherly Quan Li who is really the murderer Dread in virtual disguise. His secret revealed, Dread escapes with the access device, leaving Renie and the others stranded, perhaps forever, in this disturbing place.