(NOTE: This review contains spoiler information concerning the plot and characters. The reviewer's personal observations on the book can be found at the end of the review.)
The book opens introducing the main character, Lyra, and her daemon (pronounced demon), Pantalaimon, or as she sometimes calls him, Pan. She is a ward of Jordan College in Oxford, England, placed there years earlier by her uncle, Lord Asriel, a renowned explorer. It doesn't take long to figure out that, while many names and locales are the same as in our England, this is not the Earth you and I live in. Humans have a visible extension of their souls (daemons) that offer advice and companionship. There seems to be a mishmash of 19th-century and earlier technologies, although a few 20th-century conveniences seem to have been developed (indoor plumbing). And, of course, there are magical influences that reveal themselves through the course of the story.
Lyra is one of those children who seems to carefully dance back and forth across the line between orneriness and downright disobedience. It's this characteristic that leads her to explore the Retiring Room, reserved only for the Master of the College, its Scholars, and privileged guests. She has barely begun before someone approaches and she is forced to hide herself. It is there she discovers that a guest will be meeting with the Master, none other than her Uncle Asriel. Her joy turns to horror when she views the Master putting something into the wine he intends to serve his guest. When Lord Asriel arrives, she reveals herself and knocks out of his hand the poisoned wine. Angry at first, Asriel listens to Lyra's explanation. She then hides again as others enter the room.
Asriel makes a presentation to the Master and Scholars present, a slide show of sorts showing his latest explorations at the northernmost edges of the world, and in particular the Northern Lights, or Aurora. What shocks and amazes those present is one picture showing the Aurora with what appears to be a city. Asriel explains that he believes this to be a gateway to another World, one which is the source of a mysterious stuff called Dust. His hope is to receive more funding for further study, something the Master does not wish him to receive.
Why not? Because in this world, a religious governing body called the Magisterium oversees all aspects of the world when it comes to spiritual matters. Those who oppose the Church and its teachings face excommunication, and sometimes worse. Some fear that learning more about this Dust may undermine the influence of the Magisterium and send the world into chaos.
Shortly after Lord Asrael leaves, the Master calls Lyra into his office to inform her she is to be relocated. Jordan College is an all-male school, and she has no female influences other than the staff. She will be moving to another school where she can be brought up among young women of her own age. One of the school's staff, Mrs. Coulter, is taking a personal interest in Lyra, and comes to Jordan College to meet her personally. Although against the idea at first, Lyra is enchanted by Mrs. Coulter and her golden monkey daemon, and finally accepts the move. However, the night before she is to leave, the Master summons her to his offices and gives her a gift. It is an alethiometer, a gold object similar to a large compass, but with symbols around the edges and hands on its face. The Master informs Lyra that this is a very rare object, and that she is to take special care of it and keep its existence a secret. And with this mysterious gift, Lyra accompanies Mrs. Coulter to begin her new life.
A life, which turns out, isn't the bed of roses that Lyra expected. At first life is exhilarating as Lyra discovers new clothes, new locations, and new experiences. But during a party, her respect for Mrs. Coulter is destroyed when she discovers the golden monkey has searched her room, looking for the alethiometer. When Mrs. Coulter starts asking questions about the object, Lyra realizes it's time to leave. She grabs her belongings and slips away from the party. She is nearly kidnapped by men who she believes are in the employ of the Gobblers, a mysterious group that is rumored to spirit children away to some unknown place for God only knows what purpose. (One of her friends from Jordan College, Roger, has already gone missing.) However, she is rescued by a group of gyptian children, roving bands of nomads under the leadership of John Faa.
It is while under the care of the gyptians that she learns more about the alethiometer. By pointing three of the hands at symbols on the dial, the user can get answers to questions, which are pointed out by the fourth hand. However, the book of instructions that should accompany the alethiometer is even rarer than the object itself. Lyra must either find a book on how to use the item or figure it out on her own.
She also learns about her history. Lyra is shocked to learn that Lord Asriel is not her uncle, but her father. Years earlier he fell in love with the wife of a politician. When the woman became pregnant and gave birth, it was obvious the little girl looked nothing like the woman's husband. In a fit of rage, the politician ran to Asriel's home with the intent to harm him. Instead, Asriel killed the man. He escaped punishment through a legal quandry on the part of the Church, and returned to his explorations. And Lyra was raised first by the gyptians, then by the people at Jordan College, until she was taken under the wing of Mrs. Coulter...her mother.
After finding out that Asriel is now imprisoned in a guarded fortress in the North, the gyptians undertake a rescue operation. Lyra asks to join the group but is turned down--as if that would stop her from going to rescue both her father and her friend Roger! In the meantime, word reaches the gyptians that a massive search for Lyra is underway in the South, financed by Mrs. Coulter. It's only when Lyra begins to manipulate the alethiometer and discovers she can interpret the symbols without the use of the instruction book that John Faa agrees she should accompany the group. However, she is to remain hidden so as not to call attention to herself or the gyptians. Before the group can set out, however, they run afoul of one of Mrs. Coulter's mechanized spies. It is captured and imprisoned, but not before a second one escapes. Knowing the spy will notify Mrs. Coulter of Lyra's whereabouts, the rescue party heads north immediately....
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