August "Auggie" Pullman is a fifth-grade boy living in North River Heights in upper Manhattan. He has an extremely rare medical facial difference, which he refers to as "mandibulofacial dysostosis", which is likely Treacher Collins syndrome and a cleft palate. Due to numerous surgeries, Auggie had been home-schooled by his mother, but his parents decide to enroll him in Beecher Prep, a private school, for the start of middle school.
During Halloween, Auggie wears an old "Bleeding Scream" costume because his dog, Daisy, threw up on his "Boba Fett" costume. Unrecognized, he walks around school knowing he would not get bullied as his face is covered by the mask. When he reaches homeroom, he overhears his best friend Jack telling Auggie's bully Julian and his friends that he would "kill himself" if he looked like Auggie. Feeling hurt and betrayed by Jack, Auggie decides to quit school, but his older sister Olivia (also known as "Via" by her family), convinces him not to.
Auggie confides the incident to Summer and makes her promise not to tell anyone about the issue. Jack notices that Auggie has become quiet and distant; he asks Summer why, and though she won't divulge the secret, she says "ghost face" as a hint. At first, he isn't aware that Auggie heard what he said and believes that Auggie's just avoiding him for no reason, so Jack decides to avoid Auggie in retaliation. In December, however, Jack realizes Auggie had overheard what he said and realizes that he also heard Jack say he was pretending to be friends with him, leaving Jack shocked.
In science class, Auggie and Jack are assigned as partners for a project. When Julian asks the teacher if he could be Jack's partner instead, Jack declines. But when Julian calls Auggie a "freak," Jack punches Julian in the face leading to a fist fight. Mr. Brown and Ms. Petosa break up the fight, and as a result, Jack is suspended for two days for his actions. Knowing that Julian would get them both in trouble for bad-mouthing Auggie, Jack refuses to tell Mr. Tushman what happened. Jack sincerely apologizes to Auggie, saying he didn't mean to say the stuff he said about Auggie, and they become friends again.
During the rest of the school year, Auggie is bullied by Julian and his group. They begin to leave bullying notes on his desk and tape a class picture to his locker where Auggie is purposefully photoshopped out. When confronted, Julian's parents claim that they photoshopped Auggie out to make the photo look more presentable to guests. Julian's mother says that Auggie does not belong in Beecher Prep and claims that Julian has had nightmares as a result. Mr. Tushman decides to suspend Julian for two days despite his parents threatening to pull their funding from the school. Julian is suspended but expresses remorse and apologizes to Mr Tushman for bullying Auggie when he realizes that he'll lose all of his friends at his current school if he leaves. One night, Auggie accuses Via and their mom of lying to him and storms up to his room. A half-hour later, Via comes inside and tells Auggie that their mom is about to take their dog, Daisy, to the vet because she was sick and whimpering a lot. Later, Auggie's mom and dad came back and said Daisy had a tumor in her stomach and had to be put to sleep.
During a school trip to a nature reserve, when Auggie and Jack are attacked by seventh graders from another school, they are defended by several of Julian's friends. After their return to school, Auggie is generally more accepted by their fellow fifth graders.
At the year's end, at the graduation ceremony, Auggie is awarded the "Henry Ward Beecher Medal" which "honors students who have been notable or exemplary in certain areas throughout the school year." He gets a standing ovation, which inspires his precept for Mr. Browne, and goes back to his house for a party to celebrate. The movie ends with everyone (even Julian) clapping for Auggie and his mother commenting on him being a "wonder".