At the beginning
The novel is about a young woman named Sophie Hatter who is the oldest of three daughters living in the town of Market Chipping in the kingdom of Ingary where many fairy-tales are accepted ways of life. As the eldest, she is resigned to the fact that she will have no chance of finding her fortune, accepting that she will have a dull life running the family hat shop. That is, until she is turned into an old lady by the Witch of the Waste, a powerful witch. Sophie leaves the shop and finds work as a cleaning lady for Wizard Howl, famous in her town for eating the hearts of young women. Sophie soon learns that Howl spreads these rumors about himself to keep his privacy. There are four doors to his castle, only one of which is real, and which is enchanted to open to four different places at one time.
Making a deal
Sophie encounters Howl's fire demon, Calcifer, when she first enters the castle. It is revealed later in the novel that Calsifer used to be a shooting star and was caught by Howl on his way down to Earth. Howl felt sorry for Calcifer and made a bargain with him to save his life: Howl gave Calcifer something very precious to him, his heart, and in return, Calcifer has to stay within the castle and heat and power it. Calcifer's only thought at the time was for him to do anything to stay alive, which caused him to agree to the deal immediately. However, as they both realised some years after the deal was made, that "the contract isn't doing either of us any good in the long run". Due to his lack of heart, Howl cannot truly love a woman (he goes after them and loses interest as soon as he had made them love him in return). Whereas Calcifer is forced to do all the strong magic to keep the moving castle going and has no real freedom of his own. Although he is bound to the hearth, Calcifer possesses a great amount of magic, which allows him to recognise the fact that Sophie is under a strong curse, along with her special abbility to talk life into things. He wasted no time in trying to strike a bargain with her ("How about making a bargin with me? I'll break your spell if you agree to break this contract I'm under."). Sophie, although extremely suspicious, agrees to the deal ("All right, what are the terms of the contract? How do I break it?") in the hopes that the demon will keep his promise and break her spell. However, part of Calcifer and Howl's contract is that they are not allowed to tell people the exact terms, Sophie has to work it out on her own (with occasional hints from Calcifer, which, according to him, is allowed in the contract). At the end of the chapter Sophie reluctantly agrees to stay for about a month in the moving castle in order for Calcifer to work out how to break her spell and to guess the terms of the contract.
- Sophie Hatter - a young woman with a knack for talking to inanimate objects. The eldest of three, her life was supposed to be dull, and she would receive the least fortune of her siblings.
- Howl Jenkins Pendragon - a powerful sorcerer with a nasty reputation for stealing and eating the hearts of beautiful young ladies, who has taken to stalking around the hillsides of the Chipping Valley in his moving castle.
- Michael Fisher - a young orphan boy, taken in by Howl as an apprentice to magic. He is not yet very good at the trade, but tries hard.
- Calcifer - a Fire Demon bound to his hearth by a contract with Howl. He longs to break it and be free, and enters a secret deal with Sophie
- Witch of the Waste - an ancient, powerful witch who loves her own beauty. She spends the novel hunting down Howl after planting a curse on him.