Teenager Sarah (Jennifer Connelly) is forced by her father (Christopher Malcolm) and her stepmother (Shelley Thompson) to babysit her baby brother Toby (Toby Froud) while they are outside home. Toby does not stop crying and Sarah wishes that her stepbrother be taken by the Goblin King Jareth (David Bowie). Out of the blue, Toby stops crying and when Sarah looks for him in the cradle, she learns that her wish was granted and the Goblin King Jareth has taken him to his castle in the Goblin City in the middle of a labyrinth. Sarah repents and asks Jareth to give Toby back; but the Goblin King tells her that she has to rescue her brother before midnight, otherwise Toby will be turned into a goblin. Soon Sarah teams up with the coward goblin Hoggle (Brian Henson), the beast Ludo (Ron Mueck), and the knight Didymus (David Shaughnessy) and his dog Ambrosius (Percy Edwards) in her journey. Will they rescue Toby in time?