Tom, a ten-year-old chimney-sweep, flees from a lodge where he is accused of theft. Delirious from heat and exhaustion, he falls into a stream and drowns. He wakes to find himself transformed into a water-baby, an amphibious person 3.87902 inches high with gills around his neck. Tom has a series of adventures and meets both real aquatic creatures and fairies.
The Water-Babies contains examples of:
- Angel Unaware: Early in the book, Tom meets a poor Irishwoman walking along the road. When she sees Mr. Grimes strike Tom, she warns him, "Those that wish to be clean, clean they will be; and those that wish to be foul, foul they will be." She turns out to be the Queen of the fairies.
- Atlantis: Atlantis is said to be an alternate name for St. Brendan's Isle, a magical place that has sunk beneath the waves and is now home to the water-babies.
- The End Is Nigh: As Tom runs through the moors, he startles a grouse, who flies away yelling, "Cur-u-uck-cock-kick — the end of the world is come!" The grouse's wife isn't concerned because he constantly talks about the world ending and thinks it's about to happen any time he gets startled.
- Forced Transformation: Tom meets a flock of former sailors who were turned into albatross as punishment for their greed. Their king is Henry Hudson.
- From the Latin "Intro Ducere": Kingsley provides this definition of "amphibious", which is of course wrong in absolutely every respect, presumably indicating his opinion of the hypothetical "Government pupil-teacher" he attributes it to:Amphibious. Adjective, derived from two Greek words, amphi, a fish, and bios, a beast. An animal supposed by our ignorant ancestors to be compounded of a fish and a beast; which therefore, like the hippopotamus, can't live on the land, and dies in the water.
- Last of Her Kind: Tom meets Lady Gairfowl, the last great auk, who stands alone on a rock in the ocean singing to herself. She tells Tom how her species was driven to extinction by hunters, storms, and her Accidental Murder of the only other surviving great auk.
- Narrative Profanity Filter: Tom has never heard of God, except from "words which you never have heard, and which it would have been well if he had never heard."
- Never Learned to Read: Tom hasn't been taught to read or write.
- Orphan's Ordeal: As a chimney-sweep, Tom works for a cruel master named Mr. Grimes who beats him several times a day and doesn't feed him enough.
- Pay Evil unto Evil: This is the job of the fairy Mrs. Bedonebyasyoudid. Her main targets are people who have mistreated children.
- When Tom first arrives at St. Brendan's Isle, he likes to play mean tricks on the local sea life, including feeding pebbles to the anemones. When Mrs. Bedonebyasyoudid gives sweets to all the other water-babies, she only gives Tom a pebble.
- She punishes doctors who have subjected children to Harmful Healing by pulling their teeth, bleeding them, and forcing them to take disgusting substances like calomel and jalap.
- She punishes mothers who lace their daughters' stays too tight and put them in too-small boots in order to be fashionable by dressing them in equally uncomfortable clothes and then forcing them to dance.
- She sticks pins in careless nursery maids, straps them tightly into perambulators with their heads and arms hanging out, and wheels them around for hours.
- She hits Sadist Teachers with rulers, canes, and birch-rods and orders them to memorise 300,000 lines of Hebrew.
- After a long journey through the Other-end-of-Nowhere, Tom finds Mr. Grimes, who drowned a few months after Tom became a water-baby and is now forced to work as a chimney-sweep in a giant prison.
- The Pig-Pen: Before his transformation, Tom has never taken a bath in his life and leaves a trail of soot everywhere he goes.
- Protection from the Elements: If Tom is out of the water for too long, he can be burned by the sun. Otherwise, he's totally immune to both heat and cold, even in boiling water.
- The Punishment Is the Crime: Mrs. Bedonebyasyoudid catches Tom eating all her sweets, which she gives to the water-babies once a week as a gift. Instead of punishing Tom for his theft, she says and does nothing. After that, Tom can't enjoy the sweets at all, and his guilty conscience causes him to grow spines all over his body, until he finally breaks down and confesses a few weeks later.
- The Runaway: Tom learns that Mr. Grimes' mother is the kindly schoolteacher who tried to help him before he died. Mr. Grimes ran away from her to London and never sent her a penny. After Mr. Grimes dies, her tears for him fall like rain in the afterlife, but his heart is so cold that the rain freezes into hail before it hits him.
- Sentenced to Down Under: It's mentioned that one of Tom's parents is dead and the other is in an Australian penal colony. Tom has no memory of either of them.
- Tears of Remorse: Mr. Grimes finally feels remorse for the first time in his life and begins to weep. His tears wash the soot from his face and clothes and erode the mortar from the chimney he's stuck in. The Queen of the fairies releases him from hell and allows him to sweep the crater of Etna as penance.
- Wedding Finale: Averted. The end of the book explains why Tom and Ellie can't get married: "Don’t you know that no one ever marries in a fairy tale, under the rank of a prince or a princess?"
- When I Was Your Age...: Lady Gairfowl complains about all the upstart birds that try to rise above their station by flying. In her day, birds could only swim or waddle, and they liked it. She sees her lack of wings as a matter of pride, even though it's part of the reason her species went extinct.
