NOTE: This spoiler was submitted by Jeremy
One night, in the town of Cheesebridge, the son of Mr. Trubshaw was taken in the night by little creatures. The fiendish exterminator Archibald Snatcher (Ben Kingsley) goes to the home of Lord Portley-Rind (Jared Harris) to tell him that these creatures, known as Boxtrolls, have stolen a child, and will probably after the other children of the town. Portley-Rind sends Snatcher away, assured that no such thing will happen, until Snatcher warns him that the Boxtrolls may soon come after the town's cheese. Portley-Rind panics and agrees to let Snatcher seek out the Boxtrolls, and in return, Snatcher demands a white hat like the one on Portley-Rind's head, so that he can live a luxurious life like him. With this, Snatcher vows to kill every last Boxtroll.
The Boxtrolls are harmless little beasts that roam the streets in the dark of night, taking whatever knick-knacks and doodads they can get their hands on. Each Boxtroll is named after the products from the boxes they wear. Fish finds an old broken teddy bear and grabs it. They are relentlessly captured by Snatcher and his team of exterminators, the Redhats, including Mr. Pickles (Richard Ayoade), Mr. Trout (Nick Frost), and the maniacal Mr. Gristle (Tracy Morgan).
The Boxtrolls retreat to their underground lair. Fish goes around the lair asking for Eggs. He finds Eggs, a little human boy, walking up to him. Fish hands Eggs the teddy bear, which Eggs rips the head off and pulls out its music box. Throughout the years, the Boxtrolls raise Eggs like one of them, up to when he's a young boy (now played by Isaac Hempstead Wright). However, the Boxtrolls are continuously rounded up by the Redhats, until there are only a few left.
Eggs leads Fish and Shoe to the surface to find their fellow Boxtrolls. Catching wind of this is Lord Portley-Rind's daughter Winnie (Elle Fanning). She tries to warn her father to get his attention, but he barely acknowledges Winnie and sends her away to wash his white hat. Winnie instead throws it out on the street spitefully, but she immediately regrets it and runs out to get it. There, she spots Eggs in the dark. He is confused as to how Winnie looks so different and that she calls him "boy". The Redhats are arriving, so Eggs, Fish, and Shoe run around town to evade Mr. Gristle until they slide right back into their hole. The Redhats then find them and capture Fish. Eggs tries to save him, but they take his friend. Meanwhile, Winnie is found by Snatcher, who picks up the white hat and takes both it and her back to Portley-Rind. He is more concerned about the hat than Winnie when they are returned. Snatcher still really wants the hat, so he tries to fight Portley-Rind for it, before he decides to slip out.
The next morning, Winnie and her father go into town to see a performance from Madame Frou Frou. Eggs also slips up there to see Winnie push her way to the front when Madame Frou Frou asks for a volunteer. She sings the townspeople the story of the Trubshaw baby that was captured in the dead of night, and that they will eat other babies, complete with Winnie and Mr. Pickles performing in a sketch. Eggs is appalled by these words. After the show, Winnie is followed by Eggs, until she spots him and demands to know what he was doing with the Boxtrolls. Eggs bites Winnie's arm and says the Boxtrolls are nothing like what the story made them out to be. He runs back to find Fish, with Winnie following.
In his own hideout, Snatcher and the Redhats are about to partake in a cheesy feast, even though something happens to Snatcher whenever he eats cheese. Eggs sneaks in to rescue Fish. Snatcher then gets a terrible allergic reaction to the cheese, which starts out as a rash, until half his face is grossly inflated. Mr. Gristle goes get some leeches for his face, while Eggs frees Fish. Gristle throws the leeches in Snatcher's face as he was trying to attack Pickles and Trout. They proceed to get Fish to continue an experiment, but they see he's missing. They open the floor, which Eggs and Fish can see from above. They see the captured Boxtrolls, along with a human man hanging upside down. The Boxtrolls are being forced to build something for Snatcher, but they are elated to see Eggs. The villains see him and Fish, just as Winnie enters the place and gets excited. Eggs gets Fish and runs out with Winnie, escaping into their lair.
Winnie slides into the Boxtrolls' lair. At first, she thinks they will eat her, but is surprised to see that they do no such thing. She confronts Eggs, who proclaims to be a Boxtroll, despite Winnie telling him he is really a human like her. Fish then tells Eggs a story (which he translates to Winnie) about an inventor (Mr. Trubshaw), who was a kind man that watched the Boxtrolls with his baby boy. They did not fear them, but were impressed with their knack for inventing. However, Snatcher wanted Trubshaw to build him something dangerous. Trubshaw refused, and Snatcher tried to grab his baby. Trubshaw sent the baby with Fish to safety while Snatcher apparently killed him. Eggs realizes he may be the Trubshaw baby. Winnie convinces him to join her with the other humans. She gives him a makeover by taking off his box and using whatever the Boxtrolls can give her to make him into a proper boy.
Eggs and Winnie go to a party at her home. She teaches Eggs to shake his hands (he does, literally). At the party, Eggs meets Winnie's nervous mother, Lady Portley-Rind (Toni Collette). Eggs shakes her hands wildly and goes around greeting the others, while terrifying them and grossing them out when he tries cheese for the first time and stuffs them in his mouth before spitting them up and trying to eat them with a fork. Then, Lord Portley-Rind unveils a prized possession, a humongous block of cheese with engravings on it. Eggs tries to present himself to the people, but he's caught by Madame Frou Frou, who Eggs realizes is really Snatcher in drag. He attempts to silence Eggs before he can kill the Boxtrolls that night and claim his white hat. However, he gets called away before he can kill Eggs. Eggs tries to reveal himself again, but Snatcher grabs him and throws him under the table, causing the block of cheese to roll out the door and into the ocean.
Eggs stands up and tells everyone that Snatcher has lied to them and that he is the Trubshaw baby. Unfortunately, Lord Portley-Rind is more upset that his block of cheese has been lost. Eggs tries once more to reveal Snatcher by pulling off the wig, but Eggs just gets thrown out of the house. He goes back to the sewers after bidding Winnie goodbye, deciding that humans are the real monsters.
Eggs goes back to the lair to warn the Boxtrolls. Fish tries to give Eggs his box to put on, but he shoves it out of his hand, saying he is not a Boxtroll. Fish is offended and hides in his box. As Eggs tries to apologize, the surface begins to rumble. Snatcher and his men crash through the place in a large machine and begin to suck up the remaining Boxtrolls with his machine. Eggs tries to save Fish, but they are both knocked out and captured.
Eggs wakes up in a cage, next to the upside down man. He turns out to be Mr. Trubshaw (Simon Pegg), only he has now lost his mind after hanging upside down for so long. Eggs realizes this man is his father. Snatcher returns and sets the Boxtrolls together on top of each other as he readies his killing device. Eggs calls out to the Boxtrolls to fight back, but they don't listen to him. Trubshaw reaches out to his son and convinces him to inspire them. Eggs calls to them again to get them to run, but Snatcher lowers the machine to flatten the boxes. Eggs cries, thinking his family is dead.
Snatcher takes Eggs to publicly execute him in the machine by putting a Boxtroll mask on him before the people of the town. He calls to Lord Portley-Rind to come out and get him his white hat for ridding them of the Boxtroll menace, spilling out the flat boxes. Portley-Rind is reluctant, and only agrees if the last one (Eggs) is killed. Snatcher instead demands Portley-Rind's own hat, and, with the people chanting, is forced to do so. Snatcher then starts to lower Eggs down into a furnace to burn him alive. Winnie know it's him and runs to Pickles and Trout to convince them that they're seen as evil henchmen and not the good people Pickles thought they were. They decide to do good and stop lowering Eggs, but Gristle (still evil) grabs the remote and continues to lower Eggs. Just then, the (now naked) Boxtrolls ride in with a cart and knock the machine on its side to free Eggs, who is happy that his family is alive after having made their escape. They attack Gristle and throw him into a barrel of leeches.
When the townspeople realize the Boxtrolls are not evil, they see that Snatcher has indeed been lying to them. Snatcher runs to his machine to steal the white hat and kill the Boxtrolls. Eggs rallies up his family and convinces them that they put the machine together, so they can take it apart. The Boxtrolls do so, while Winnie, Pickles, Trout, and even Trubshaw take Lord Portley-Rind's hat to divert Snatcher's attention while the Boxtrolls try and sneak the suction hose into the sewers to get water and put out the furnace fire. Eggs fights Snatcher on his machine, telling him he's the real monster. He presses the suction button and gets enough water to put out the furnace. Just then, Portley-Rind's fellow Whitehats bring out the giant block of cheese from the ocean, now filthy and moss-covered. Snatcher tries to kill Eggs himself, but they both fall into the block of cheese, splattering it everywhere. Eggs is okay, but Snatcher emerges all swollen up to a genuinely monstrous size. He grabs Winnie and threatens her unless Portley-Rind hands over the hat. He does so for Winnie's safety. Snatcher gloats over his victory and demands to go to the tasting room where the Whitehats try out all their cheese.
Eggs, Winnie, Portley-Rind, and Fish are forced to wear hats with Snatcher as he feasts on what is said to be the most delicious cheese of all. He takes a small slice, and before he can put it in his mouth, Eggs tries to convince him that he doesn't have to be evil. Snatcher claims this is his destiny, and he eats the cheese. Everything seems fine, until Snatcher actually blows up.
Later on, Winnie is telling the townspeople the true story of the heroic Boxtrolls. The Boxtrolls are now accepted among the townspeople, while still maintaining their relationship with Eggs. Eggs goes around in a cart with his father, ready to catch up after all the years. Pickles and Trout have now adjusted to being active members of society. Finally, Shoe gathers some trash he finds and scurries back into the hole.