One evening in the quaint village of Cheesebridge, panic ensues as news spreads that a baby has been abducted by strange creatures that dwell below ground, known as Boxtrolls—named so because they dress themselves in discarded cardboard boxes. In this chaos, a scruffy man named Archibald Snatcher seeks an audience with the city’s leader, Lord Portley-Rind. Initially dismissive, Rind changes his tune when Snatcher claims that the Boxtrolls pose a potential threat to the town's precious cheese supply.
Snatcher cunningly proposes to eliminate the Boxtrolls in exchange for a position of authority in the city, complete with a coveted white hat—which signifies respect—and access to the cheese-tasting room in City Hall. However, Rind cleverly stipulates that Snatcher must rid the village of Boxtrolls before granting his demands.
As time goes by, Snatcher, under the guise of the Red Hats, embarks on nightly hunts to capture the Boxtrolls. His motley crew includes a diminutive man named Mr. Gristle and his friends Mr. Trout and Mr. Pickles, who frequently muse about morality while their leader becomes increasingly obsessed. Meanwhile, the Boxtrolls maintain their peaceful existence underground, far removed from the rumors of their monstrous nature. The baby we saw earlier has grown into a boy known as Eggs (voiced by Isaac Hempstead Wright) and is cared for by a Boxtroll named Fish, who shares music and friendship with the lad.
As Snatcher captures more Boxtrolls, their numbers dwindle. Eggs, now a curious boy, sets out on nightly excursions to scavenge for mechanical parts to repair their home. During one such quest, Rind's daughter, Winnie, catches sight of him darting about. However, everything changes when Snatcher's men manage to capture Fish.
Stricken by the loss of his best friend, Eggs becomes resolute, questioning why they must always hide instead of fighting back. Disguised as a human, Eggs bravely ventures to the surface for the first time, coinciding with a festival celebrating the 10th anniversary of the "Trapshaw Baby" incident. Unfortunately, the event serves to further perpetuate the town’s belief that Boxtrolls are horrific beasts.
After enduring a misrepresented act by Madame Froufrou, who nastily reinforces the prevailing stereotype, Eggs manages to interact with Winnie, who directs him to Snatcher’s hideout in an abandoned factory on the town's outskirts. Inside, he discovers Snatcher and his accomplices engaged in a role-playing session, with Snatcher delighting in a cheese-tasting activity while ignoring the dangers of his allergies. Amidst the chaos, Eggs spots Fish trapped in a cage and sets out to free him.
Just as they manage to escape, Winnie—having followed Eggs into the Boxtrolls' lair—retrieves the shocking truth: the rumors surrounding the Boxtrolls are baseless, and Eggs may not even be human. Fish recounts how they were once friends with Eggs' father, an inventor who Snatcher had betrayed. The Boxtrolls had taken Eggs away after this tragic event.
In a bid to thwart Snatcher's nefarious plans and restore truth, Winnie reveals the gala at City Hall that night, inspiring the Boxtrolls to help dress Eggs properly for the occasion. Yet, things spiral into chaos when Snatcher, disguised as a glamorous performer, accidentally exposes Eggs during the event, leading to a disastrous scene involving a gigantic wheel of Brie cheese rolling into the lake.
Determined to reveal Snatcher's true nature, Eggs returns to the Boxtrolls only to face a violent new threat when Snatcher arrives with a massive machine designed to capture his former allies. In a tense confrontation, Eggs is horrified as Snatcher’s actions lead to devastation for the Boxtrolls. Fighting back, Eggs attempts to rally his friends to rise against their oppressors, urging them to stand and defend themselves.
As the climax unfolds, the townspeople are caught between Snatcher’s deceit and Eggs’ plea for understanding. When Snatcher finally confronts Lord Portley-Rind to demand the white hat, chaos ensues. Amidst the frantic struggle, Snatcher's wickedness is revealed, leading to a spectacular allergic reaction after he tastes forbidden cheese, resulting in a climactic showdown.
In the aftermath, Cheesebridge becomes a welcoming haven for the Boxtrolls, who prove to be invaluable community members. Eggs joyfully reunites with his father, while Rind learns the importance of family. Even Snatcher's former henchmen, Mr. Pickles and Mr. Trout, find purpose in protecting their streets rather than causing havoc. However, as the tale winds down, Mr. Pickles ponders a whimsical question about their existence, contemplating whether unseen giants guide them through their tiny universe.
