City of the Beasts begins with the story of Alexander Cold, who is 15 years old and going through a family crisis. While his parents leave for Texas to try to treat his mother's cancer, Alex and his sisters are sent to live with their grandmothers. Despite his desperate pleading, Alex is sent off to New York City to stay with his eccentric grandmother Kate Cold, a reporter for International Geographic Magazine . His sisters, however are sent to live with their Grandmother Carla. Meanwhile, Kate announces that she will be taking Alex with her to the Amazon rainforest during his visit. Once Alex arrives in New York City, and finds out that his grandmother had no intentions of collecting him at the airport and is forced to walk to her apartment, several blocks away. In the process he meets a girl named Morgana, a homeless girl in her mid-20s. She offers him pot and steals his backpack that contained his clothes, his money and his flute. He is greatly saddened by the loss of his precious flute, but Kate gives him the flute belonging to his grandfather, Joseph Cold. Soon, they pack off to go to the Amazon with some professors and photographers. The reason Kate goes is to write an article about the Beast.
When Alex and his Grandmother Kate reach the jungle, they join the rest of the expedition group: Timothy Bruce (photographer); and his assistant Joel Gonzalez. Accompanying them is the famous anthropologist, Ludovic Leblanc, the beautiful Venezuelan physician Dr. Omayra Torres, who is coming along to vaccinate natives, and Cesar Santos, their Brazilian guide. Alex soon befriends Nadia Santos, Cesar's twelve-year-old daughter.
The group leaves by boat, traveling upriver toward their destination in Eye of the World. Everyone in the group feels uncomfortable, as if someone were watching them constantly. One of the soldiers who is with them dies when he is shot by a poisoned dart. Later, Joel Gonzalez, the photographer's assistant, is attacked and nearly killed by an anaconda. After another soldier's death, this time at the hands of a Beast, they decide to send several people back with the wounded Joel Gonzalez - and they are given the task to send help back to the expedition.
When they are left alone, Alex plays his grandfather's flute to relieve the tedium. The music attracts the mysterious People of the Mist , who kidnap the two children. They travel farther into the forest and arrive at a waterfall which they must climb to reach Eye of the World, the village of the People of the Mist. Due to Alex's skills in rock climbing, this isn't much of a problem for him; however, Nadia is afraid of heights. After they reach the top, Alex is sent back down again to rescue their chief, Mokarita, who had fallen and been mortally wounded. When everyone arrives at the top, they set off for the home of the People of the Mist .
When they reach the village, they are welcomed by the Indians - but their happiness is tempered by the death of Mokarita, which follows shortly after. He is given a traditional funeral, which unfortunately sends up a great amount of smoke from the pyre. During the funeral, everyone is given a drug which reveals to Nadia her totem of the eagle. Jaguar and Eagle are initiated into the clan. Alex, being fifteen, is put through a rite of passage into manhood; during the ceremony, unusual things happen. Firstly, he turns into a jaguar, his totem; secondly, he receives a vision of his mom on her hospital bed and he talks briefly with her. After the ceremonies, the Shaman takes them to visit the Beasts, who live in a city deep within the forest. These Beasts are considered gods by the People of the Mist. Jaguar correctly assumes their city to be the famous El Dorado which is really made from fool's gold. Jaguar and Eagle embark on a journey to visit El Dorado and its inhabitants with the help of Walimai, the mystic's spirit wife who will serve as their guide. The city is located inside of an inactive volcano, and the only entrance is a confusing labyrinth of lava tunnels and caves. They all decide what to do and how to do it.
Upon arrival, Alex and Nadia meet with the“Beasts”. The creatures, which look something like giant sloths, function as the living memory of the tribe by remembering long epic poems recited by Walimai and his predecessors. Fearing the capture of these ancient creatures by western scientists, they warn them to be careful of foreigners (such as the expedition group they both belonged to). In exchange for protecting them, the two children ask for gifts: Nadia the "crystal eggs" and Alex the water of life to save his mother. They both manage to get them, but only by giving up that which was really important to them. Nadia gives up theprotective necklace given to her by Walimai, and Alex gives up the flute given to him. Upon returning to the village, they discover that it has been taken over by the Expedition, Carias, and Ariosto. After Nadia convinces the Indians to receive vaccinations, the children realize that the vaccines are actually deadly doses of the measles virus, part of Carias's plan to destroy the Amazonian Indians. Karakawe, an expedition member, is revealed to be an officer of the Department for the Protection of Indigenous Peoples; he is shot by Ariosto. The Indians flee into the woods as a full-fledged gunfight breaks out. Luckily, it ends quickly. Ariosto and his soldiers take captive all of the members of the manage to escape; the rest of the men are knocked unconscious by the smell of one of the Beasts. Ariosto is knocked out by the stench and then killed by the Beast. After the People of the Mist reach an agreement with the remaining members of the expedition (they will protect that area with all the power, influence, and money they can muster),they leave.
In the end, Nadia and Alex must part ways. She gives Alex the three "crystal eggs", which turn out to be giant diamonds.