Taran Wanderer is the story of the title character, Taran, who journeys across the fantasy land of Prydain in search of his origins. Taran longs to find the family that abandoned him and left him a foundling in the care of Dallben, an enigmatic wizard who professes to know little of Taran's past. Taran departs from his friends to seek his identity, but in the end he is unable to discover his heritage, instead coming to terms with himself as an individual.
Taran and Gurgi have returned to Caer Dallben. It is now full springtime, at least three years after The Book of Three .
Taran knows that he loves Princess Eilonwy, whom he left at the royal court of Dinas Rhydnant for education in the ways of a princess. Although he has proven his worth as a man several times over, he is restless and determined to know his parentage, noble or common, partly in hopes that noble birth will support a marriage proposal. Dallben the enchanter tells him nothing but gives his approval for Taran and Gurgi to travel on their own in search of an answer.
They travel first to the Marshes of Morva to ask the witches Orddu, Orwen and Orgoch. Taran has nothing of great value to give in exchange, so Orddu merely tells him of an alternative: the Mirror of Llunet in the far east Llawgadarn Mountains will show him who he is.
Taran sets out to Cantrev Cadiffor to be outfitted for a longer journey by King Smoit. After a border patrol of Smoit's vassal, Lord Goryon steals his horse Melynlas and Gurgi's pony. They spend the night with the farm couple Aeddan and Alarca who have lost their son and livestock. Taran would be welcome to remain, but he gently declines and leaves with new respect for common farmers. They recover their steeds shortly after because Melynlas will have no other rider, and Goryon is relieved to escape the burden of mastering him. At the neighboring stronghold of Lord Gast, they meet old friend Fflewddur Fflam, who seems to return to wandering as a bard every spring. Together they go on to Caer Cadarn where Smoit welcomes them.
Goryon and Gast have been feuding for years, especially over the prize cow Cornillo. When their dispute breaks out again the next day, Taran questions King Smoit's habitual resort of imprisonment and persuades him to try Taran's judgment. Namely, the rival cantrev lords shall resow the fields of Aeddan, which have been ruined by battles. The prize cow shall be further compensation, although the lords shall have her calves. The remainder of their coming herds shall be divided in half by Goryon, and Gast will choose which half to take for himself. The childless widower Smoit later offers to adopt Taran as his son, who will succeed as King of Cadiffor. Taran declines but says he will gladly accept if he discovers noble birth.
Continuing eastward, they cross Ystrad. Taran's pet crow Kaw and Fflewddur's mount Llyan, a giant cat, find treasures which they bring to their masters. Kaw brings a polished bone the size of a toothpick, which has been stashed high in a tree. Llyan brings a green and yellow frog that has nearly dried to death: their old friend Doli the dwarf, whom they revive. Doli has been transformed during investigation of a deadly threat to the Fair Folk. He knows that he is not the first to disappear in animal form, for a human wizard named Morda has attained the power to enchant them, and to raid their underground realms.
Taran, Gurgi and Fflewddur investigate Morda's abode, but all are captured by his snares. After explaining his history, boasts, and plans, Morda turns Fflewddur and Gurgi into a hare and a mouse, but fails to transform Taran. Something protects him, and he guesses from the stump of Morda's little finger that it is the polished bone. Although elderly, Morda is stronger than Taran, and his strength finally snaps the bone in desperate fury to regain it, causing his defeat. Taran finds that Morda wears a silver crescent moon with a pendant jewel on a necklace.
Eilonwy has one without the jewel, and Morda - prompted by Taran's recognition of the symbol of the House of Llyr - has revealed the primary source of his magic. After Eilonwy was kidnapped as a child, the long search by her mother Angharad ended there, where she weakly sought shelter. Morda inherited both the amulet she wore and the empty book among her possessions. He mastered the amulet and developed its power, and gave the book to a pest named Glew. ( The Castle of Llyr .)
Morda's death restores Doli and the others to their natural forms. Before parting, Taran gives the jewel from Angharad's amulet to Doli (returning a gift by the Fair Folk to the House of Llyr) and Doli identifies the ceremonial horn Taran wears in token of Eilonwy's pledge. It will summon the Fair Folk to his assistance, and one summons remains.
Taran, Gurgi, and Fflewddur camp next with the ruffian Dorath and his band. Their hosts suspect a quest for treasure and offer guidance to Llunet, in exchange for a share. The guests try to slip away early next morning, but Dorath prevents it and extracts a wager on hand-to-hand combat with Taran. He cheats and takes Taran's sword, then departs.
An old shepherd, Craddoc, with decrepit holdings, welcomes the companions next. From Taran's account of the mission, he welcomes Taran as his son. Fflewddur departs, but Taran and Gurgi remain and labor beside Craddoc. Taran and Craddoc develop a bond, but Taran also resents the end of his dream of noble birth. During the next winter, however, Craddoc suffers a bad fall down a mountain gorge and Taran is unable to rescue him. Near death, he reveals that he knew enough of Dallben's history to pose as Taran's father and gain Taran as a son. The gorge and the weather threaten Taran too, and he finally summons the Fair Folk who are able to save only himself and Gurgi.
Afterward, Taran and Gurgi continue eastward, across Little Avren to the Free Commots. They stay first with lucky Llonio and his family on the banks of the river, where Taran learns that life is a net to gather what comes. Next, Taran assists and learns the trades of three great craftmasters: Hevydd the smith, Dwyvach the weaver, and Annlaw the potter. They teach him that life is a forge, a loom, and a potter's wheel. He learns enough that he would be welcome to remain as an assistant, but pottery alone seems to call to him and he realizes to his dismay that he will never master it. He gains a new sword, a new cloak, and a new bowl. Driving the wares of Annlaw to Commot Isav, he leads the poor farming village in resistance of a raid by Dorath, killing half the band at no loss of life on the farmers' side.
Annlaw tells Taran the way to the Mirror of Llunet; he knows it, but has never visited, for he knows who he is. After a short journey, Taran and Gurgi find the Mirror - a pool of water at the mouth of a cave beyond the Lake of Llunet. Taran gazes into it, and he is astonished, but Dorath interrupts, now alone. Evidently there is no treasure, so Taran and the ruffian are soon at swordpoint. His old sword shatters on his new one and Dorath flees. Taran does not pursue but returns to Annlaw. He relates that the Mirror showed his own reflection and nothing more. He does not feel cheated by Orddu, for he saw what he had become and all he had learned on the way.