The Dwarf contains a number of truly interesting and compelling characters. Some of the more important and central characters in this short novel are described below.

The Dwarf himself in the narrator of this story. Living up to his title, he is is just over two feet tall. He is employed by the Prince but really is hardly noticed by the members of the court. He considers himself to be the most important member of the court, which is clearly self-delusion. He has a fondness for cruelty, violence, and no-good deeds. He takes joy in nothing except the pain of others and respects nobody, except possibly the Prince. He values his religious devotion but tends to prefer the idea of a wrathful God to a merciful one. While the other characters of this story grow and mature over the course of the book, the Dwarf seems incapable of self-reflection and character growth and, as such, represents the worst parts of people's humanity.

Master Bernardo is a true Renaissance man with endless curiosity. This painter, inventor, engineer, and scientist is clearly supposed to conjure up images of Leonardo Da Vinci. He creates a number of masterpieces in this story, including a portrait of the Prince's wife. While he is capable of creating beautiful art, he also puts his skills to use for more diabolical purposes in order to serve his Prince.

The Prince is the ruler of the Italian city-state in which this story is set. The very embodiment of Machiavellian notions, the Prince goes to great lengths in his pursuit of power, often using the Dwarf as his henchman. However, he turns on the Dwarf after his wife and daughter die.

Princess Teodora is the wife of the Prince. She employs the Dwarf in carrying secret notes to her lovers. While he cannot explain exactly why, the Dwarf feels extreme loyalty towards her that borders on affection.

Angelica is the kind, loving, naive, and innocent daughter of the Prince. Having no evil bone in her body, she is presented as the complete opposite of the conniving sociopathic Dwarf. All this makes her death that much more tragic when she drowns herself after the death of her lover.

Don Ricardo is one of the Princess Teodora's secret lovers despite his friendship with the Prince. He dies when the Dwarf takes it upon himself to serve him poisoned wine.

Lodovico Montanza il Toro is the Prince's arch nemesis. He and his companions are murdered by the Dwarf upon the Prince's orders after celebrating a cessation of hostilities with their "former" enemy.

Giovanni Montanza is Lodovico's son and the secret lover of Princess Angelica. When he is sharing a bed with the Princess, he is informed on by the Dwarf. This results in his immediate execution and makes relations with Lodovico that much more tenuous.

Boccarossa is the opportunistic leader of a band of mercenary soldiers. The Dwarf has admiration for his ruthless qualities. Boccarossa eventually turns on the Prince and leads the forces that defeat him after being hired by the brother of the slain Lodovico.

Ercole Montanza, the brother of Lodovico, leads the forces against the Prince in vengeance for his slain brother and nephew.