One day Bod fails at a lesson with one of his teachers, Mr. Pennyworth, who wants him to learn to Fade like a ghost. Afterward, Bod climbs an apple tree, trying to grab an apple that is out of reach. A branch breaks, and Bod falls into a corner of the graveyard he knows to be unconsecrated ground, a site where criminals, suicides, and witches are buried. There he meets an ugly girl, Liza Hempstock, who explains that she died by being both drowned and burned. He asks if she is a witch. She says yes and explains that she cursed her whole town as revenge for killing her.

Bod feels sorry for Liza because she does not have her own headstone, but he knows he does not have enough money to buy her one. He climbs down into the barrow of the Sleer and steals an old brooch, hoping it is worth money. He is still not allowed to go into town, but he breaks the rules and leaves the graveyard for the first time since he was a baby.

Abanazer Bolger, the man who runs the pawn shop, knows immediately that Bod’s brooch is valuable. He lures Bod into a back room and locks him in. He calls a friend, Tom Hustings, and Bod listens through the door as the two of them argue about the value of the find. The brooch can be sold legally, for quite a lot, or illegally for even more. They also have a card from the man Jack, and they suspect that Bod is the boy Jack is looking for. If they give him up to Jack, they may get a great deal of money—but they will not be able to force Bod to find them more treasure.

Bod cannot escape from the locked room, but the witch Liza Hemptsock appears and helps him Fade so that the evil men cannot see them. The men drink sloe gin and whisky and eventually fight each other over the brooch. When they are both passed out, Bod sneaks past them, taking back the brooch along with a paperweight and some paint. At Liza’s insistence, he also steals a creepy-looking black-rimmed card with the name Jack written on it, in order to give it to Silas.

Bod gets in trouble with his parents and Silas for his adventure, but afterward he is able to Fade as well as any ghost. He returns the brooch to the barrow, and he paints the paperweight to make a headstone for Liza. She is thankful, and the action seals their friendship.