Princess Irene is a dynamic character who grows as the story unfolds. Throughout the narrative, she gradually, and sometimes painfully, learns about a supernatural reality beyond the visible world—a deeper truth whose power is unlocked through faith in the unseen. Early in the story, Irene struggles to convince herself that her Grandmother truly exists and cares about the state of her soul. Initially, Irene is frustrated because Lootie refuses to believe in such a being, and later, Irene herself starts to think the entire experience might have been just a dream. Midway through the story, Irene's faith falters one final time. A goblin's deformed creature catches her off guard in her bedroom. Instead of heading upstairs as Grandmother advised, "her heart failed her" briefly, and she rashly ran outside where the goblins could capture her. Fortunately, Irene conquers her panic and returns to Grandmother, who forgives her since she didn't act "willfully." Afterward, she seems completely confident in her faith and soon undertakes a perilous mission. She follows an invisible thread, spun by Grandmother from spiders' webs, deep into the mountain to save Curdie, who had been taken by the goblins. Thus, Irene uses her faith to aid another.

To Irene's astonishment, she saw the most beautiful room she had ever encountered!
Curdie's guide through the goblin caves is a simple ball of string, collected for him by his mother. This ordinary string fails Curdie, leading to his capture by the goblins. Using the magical thread—a symbol of her trust in Grandmother—Irene discovers Curdie's prison and guides him to freedom. Later, when Irene brings Curdie upstairs to meet Grandmother, he is unable to see her. He perceives only "a heap of musty straw" where Grandmother's magnificent furniture should be. "Curdie is not yet able to believe some things," Grandmother explains to reassure Irene.

In many respects, Curdie is a classic hero. Courageous and resourceful, he prioritizes the well-being of others over his own safety. Yet, he possesses the unique ability to create songs that bewilder his enemy, the goblins. As a natural poet, Curdie demonstrates the importance of an imaginative approach to life, one that uses intuition as a guide through the maze of error and confusion. A crucial role of imagination is to keep the mind open to belief. Eventually, through trials and guidance, Curdie's faith matures to the point where he can see Grandmother and use the invisible thread.

The goblins dwell beneath the earth, avoiding the light. They despise music and creative beings. Their thoughts are consumed by revenge and control. Reflecting the corruption of their minds, their bodies have become twisted and malformed. They symbolize what happens to individuals who abandon a spiritual path. Despite their malicious humor, often directed at one another, they serve as fascinating foes.

Grandmother, a captivating and enigmatic character, stands far above the gloomy, subterranean goblins. She reveals to others that there is a reality beyond this earthly existence. Having lived for centuries, she can transform her appearance and possesses a remarkable lamp that can illuminate through walls, all signs of her supernatural essence. Yet, she is not a witch. Rather, her nature is akin to Christ's. Her purpose in the narrative is to guide Irene gently and deliberately towards mature faith. Throughout this journey, Irene evolves from her self-absorbed childhood perspective and begins to care for others by protecting Lootie from the king’s anger and saving Curdie.

Grandmother also has the ability to heal both body and soul. She uses an ointment to mend a cut on Irene’s finger. Her purifying fire of roses is reserved for those who have reached a certain level of spiritual insight, and the silver bath she immerses Irene in after the taxing rescue mission provides Irene with peace of mind and physical comfort. Despite these mystical abilities, the core quality of love shines through. "I confess I have sometimes been afraid about my children," she confides to Irene at one point. Grandmother encourages us to look beyond the haze of daily life and perceive the truth of a greater reality, the realm of spirit and imagination.