The Magician's Nephew features a complex interaction among its characters, but Digory Kirke is the main character. At the start of the novel, Digory and his mother are living with his aunt, because his mother is deathly ill and cannot care for him. One important aspect of The Magician's Nephew is how Digory matures from chapter to chapter. At the start of the novel, he is impulsive and determined to have his own way, even when having his own way hurts others. When on Charn, he actually hurts Polly in order to ring the bell that revives Jadis.

On the other hand, Polly, who lives down the block from Digory, is not as driven in her behavior as Digory. After all, her mother is not dying. She just wants to make friends, and crawling through the attic to the abandoned house does seem like a fine adventure, but she is too trusting of grownups. Digory's Uncle Andrew persuades Polly to touch one of the magic yellow rings: "And immediately, without a flash or a noise or a warning of any sort, there was no Polly."

With this event, positive characteristics in Digory begin to show. For one thing, he has enough understanding of people's characters to know that Uncle Andrew is "a wicked, cruel magician." Further, he is loyal to a friend. He is quick to decide that he must follow Polly to help her. In this, he shows courage, because there is no telling what evil he might face when he touches a yellow ring and disappears. Later, he shows imagination and intelligence when he explains how the Wood between the Worlds works, comparing it to the common attic of the block of houses he and Polly have left:

"It isn't a room in any of the houses. In a way, it isn't really part of any of the houses. But once you're in the tunnel you can go along it and come out into any of the houses in the row. Mightn't this wood be the same?"

He realizes that the pools are like doors, and the worlds they lead to are like houses, a fairly profound insight.

There is a pair of villains in The Magician's Nephew: Uncle Andrew and Jadis, though Uncle Andrew, a fool, is not as thoroughly corrupt as the Queen of Charn. In Andrew are echoed some of the characteristics of despots that may have particularly angered Lewis after World War II. Uncle Andrew insists, "Men like me who possess hidden wisdom, are freed from common rules." This is his excuse for experimenting on Polly, and it is a cover for his actual cowardice; if he were anxious to know where a person would go after touching a yellow ring, why not go himself instead of sending a child? Uncle Andrew's justifications become even more menacing when they are echoed by Jadis.

"I, Jadis, the last Queen, but the Queen of the World," she says of herself. Her sister had led a revolt against her and very nearly succeeded, but Jadis knew "the Deplorable Word." She tells Digory, "It had long been known to the great kings of our race that there was a word which, if spoken with the proper ceremonies, would destroy all living things except the one who spoke it." She annihilates all life on her world in such a manner. In the sheer depth of her evil, she believes ruling an unpopulated world to be better than not being the ruler, and she insists that "what would be wrong for you or for any of the common people is not wrong in a great Queen such as I."

One of the themes of The Magician's Nephew is the difference between practicality and good. At first Jadis speaks only to Digory: "In Charn, she [Jadis] took no notice of Polly (until the very end) because Digory was the one she wanted to make use of," however, once "she had Uncle Andrew, she took no notice of Digory. I expect most witches are like that. They are not interested in things or people unless they can use them; they are terribly practical."

For Jadis and Uncle Andrew, the price of being practical before being good results in the loss of a paradise. The world Aslan creates is not particularly practical with its numerous talking animals and spirits, its great forests, magnificent rivers, and active sky, but it is beautiful, and gladdens the spirits of those who are less "practical" than Jadis and Uncle Andrew.

Uncle Andrew pays for his refusal to recognize the wonders around him with his sanity. He returns to Earth no longer quite evil, but not quite understanding anything, either. Jadis pays the more terrible price. She defies the rules of the walled garden in the west and goes over the wall and eats the forbidden fruit. By eating the fruit, she gains eternal life—her heart's desire—but that life is forever ruined for her, because eating the fruit brings with it the knowledge of her own debased nature and miserable loneliness. She becomes Aslan's permanent enemy, and the greatest single source of evil in Narnia's world. However, determined as she is to ruin Aslan's creation, she can never overcome Aslan's immense creative power. Being "terribly practical," she learns all the magic of the world that she can, but she also cannot imagine any power greater than what she learns. This will contribute to her downfall in The Lion, the Witch and the Wardrobe.

Aslan himself is a towering figure in The Magician's Nephew. His song brings form and shape to the world of Narnia, creating seas and lands, plants and animals. The song varies according to what he is creating, but its overall impression is one of joy and magnificence to everyone except Jadis and Uncle Andrew, who loath it. Jadis even throws a piece of a street lamp at Aslan, striking the golden lion in its head. Aslan pays it no notice, and it falls to the ground and grows into the street lamp that Lucy discovers in The Lion, the Witch and the Wardrobe, which will always mark the Lantern Wastes of Narnia.

In "the deepest, wildest voice they had ever heard," Aslan says, "Narnia, Narnia, awake. Love. Think. Speak. Be walking trees. Be talking beasts. Be divine waters." Thus, "Out of the trees wild people stepped forth, gods and goddesses of the wood; with them came Fauns and Satyrs and Dwarfs. Out of the river rose the river god with his Naiad daughters." There is laughter as well as seriousness, and Aslan is a source of fun as well as duty.

Even so, Uncle Andrew hears only animal noises, while Digory, Polly, and others hear animals talking and joking. "Now the trouble about trying to make yourself stupider than you really are," says the narrator, "is that you very often succeed," and Uncle Andrew's insistence on practicality has made him very stupid, because he is determined not to understand the miraculous events occurring around him.

Aslan is stern as well as joyous, and he notes that Jadis represents the introduction of evil into his brand new world, and he lays responsibility for her presence on Digory, who had revived Jadis while hurting Polly, and who had brought her to the world of Narnia. "And as Adam's race has done the harm, Adam's race shall help to heal it," declares Aslan, drawing on I Corinthians 15:21, which says, "For since by man came death, by man came also the resurrection of the dead." Digory reveals how much he has matured by accepting Aslan's task of fetching fruit from the walled garden in the western mountains, and later shows that he has taken great strides toward manhood by defying temptation in the garden and delivering the fruit to Aslan, whole.

Aslan appears in every novel in "The Chronicles of Narnia," and in general he seems bigger in each. This is because the more a person knows Aslan, the bigger he is to that person, and as he is known to characters in "The Chronicles of Narnia," he grows bigger. In The Magician's Nephew, he mentions one of his most important qualities—the willingness to take onto himself the wrongs of other. He says, "Evil will come of that evil [Jadis], but it is a long way off, and I will see to it that the worst falls upon myself." This means that at the start of the world of Narnia, Aslan has already set for himself the sacrifice he will make in The Lion, the Witch and the Wardrobe, where his murder at the hands of Jadis and all the evil in Narnia will start death running backwards. He can laugh with the jackdaw, he will cry with Digory over Digory's mother's suffering, and he has the courage and determination to foresee and fulfill an awful sacrifice that he must make in order to help others.