As she clears out her old bedroom, Polly discovers that below her memories, in which she led an entirely normal and unremarkable life, there is a second set of memories, which are rather unusual.
As Polly thinks back to this "second set" of memories, the point where they seem to diverge is when she stumbled into a funeral in an old mansion, Hunsdon House, when she was ten and playing with her best friend, Nina. There, she was approached by a man named Thomas Lynn who took her back outside and kept her company. He takes her back inside to help him select six pictures from a large pile, his share of the estate of the deceased; one of them is a photograph called "Fire and Hemlock" (hence the name of the novel), which he gave to her. He then takes her back to her grandmother's house, where she is living.
Over the following years Tom and Polly continue a friendship largely through correspondence, with occasional visits. Tom sends her books and letters with stories in them, many of which tie into the general theme of his predicament. Together, the two come up with stories about a hero named Tan Coul and his assistant Hero, who are Mr. Lynn's and Polly's alter egos, respectively. These stories all eventually come true, after a fashion. For instance, after discussing Tan Coul's horse, they encounter an identical horse disrupting traffic in the streets of London, having escaped from a nearby circus. An invented town and hardware store later turn out to be real, the proprietor being the spitting image of Tom, and his nephew Leslie falling into the story much later as a possible victim of Laurel's. Tom and Polly's story features three other heroes; later on, Tom gives Polly a photograph of all the members of his orchestra, and asks her to identify them. She immediately finds the other three heroes. These three are exactly the ones with whom Tom was considering setting up an independent string quartet.
All the while, Polly encounters members of Tom's ex-wife's family, all of whom seem to be threatening her and trying to break off her relationship with Tom. These include Seb, who is a few years older than Polly. Polly understands the threats as Laurel (Tom's ex-wife) having some sort of power over him. Tom refuses to talk about it.
This friendship develops against the background of Polly's growing up in her own disintegrating family life: her father Reg leaves, and a new lodger moves in and begins a relationship with her mother, Ivy. When Ivy sends her to live with her father in Bristol, it soon becomes apparent that she was not wanted there, her father having neither told his girlfriend that she was coming nor that she was supposed to live with them permanently. Eventually Polly moves in with her grandmother, who acts as a strong, fierce, strict anchor in her life.
As Polly turns sixteen, she realises that she has always loved Tom, but when she is rejected by him (in part because of their age difference, but also for her own safety, as she later discovers) she sets out to discover the secret of his relationship with the sinister Laurel that is somehow connected to all the supernatural events that happen to Tom and her. To do this, she performs voodoo-like ceremony, and it partly succeeds - she is summoned to Hunsdon House, where it all started. Laurel is there, but humiliates Polly and tells her (untruthfully) that Tom is dying of cancer, and wants to be left alone by her. Mortified, Polly agrees to forget him, and leaves. Her second set of memories ends here.
Three years later, sitting in front of the picture (that she now realizes was a gift from Tom) Polly decides to start investigating, and finds out that all memory of Tom has been erased from her life, and that he has been eradicated from the memories of anyone who should have known him. As well as this, other people that she met in connection with Tom have no idea who she is, her friend Nina believes that Polly stopped talking to her years ago, and friends that she met through Tom have apparently never met her. She becomes frustrated, and is determined to find Tom, the man she knew and still loves.
In this she is aided by reading two ballads, Tam Lin and Thomas the Rhymer, which help her figure out the truth. In reality, Tom has entered into a deal with the so-called Queen of the Fairies - Laurel. The time has now come when he must give his life to prolong that of her husband, the sinister Morton Leroy, the King of the Fairies.
Using the information in the ballads as an instruction, she arrives at the ceremony over which Laurel is presiding, and manages to outwit her and secure Tom's life, and, depending on the way you interpret the strange happenings of the ending, his love.