The tale begins with "once upon a time" and a description of a "very beautiful doll's-house" belonging to a doll called Lucinda and her doll-cook Jane. Jane never cooks because the doll's-house food is made of plaster and was "bought ready-made, in a box full of shavings". Though the food will not come off the plates, it is "extremely beautiful".
One morning the dolls leave the nursery for a drive in their perambulator. No one is in the nursery when Tom Thumb and Hunca Munca , two mice living under the skirting board, peep out and cross the hearthrug to the doll's-house. They open the door, enter, and "squeak for joy" when they discover the dining table set for dinner. It is "all so convenient!" Tom Thumb discovers the food is plaster and loses his temper.
The two smash every dish on the table – "bang, bang, smash, smash!" – and even try to burn one in the "red-hot crinkly paper fire" in the kitchen fireplace. Tom Thumb scurries up the sootless chimney while Hunca Munca empties the kitchen canisters of their red and blue beads. Tom Thumb takes the dolls' dresses from the chest of drawers and tosses them out the window while Hunca Munca pulls the feathers from the dolls' bolster. In the midst of her mischief, Hunca Munca remembers she needs a bolster and the two take the dolls' bolster to their mouse-hole.
They carry off several small odds and ends from the doll's-house including a bird cage and a bookcase that will not fit through the mouse-hole. The nursery door suddenly opens and the dolls return in their perambulator. Lucinda and Jane are speechless when they behold the vandalism in their house.
The little girl who owns the doll's-house gets a policeman doll and positions it at the front door, but her nurse is more practical and sets a mouse-trap. We then learn that the mice are not "so very naughty after all": Tom Thumb pays for his crimes with a crooked sixpence placed in the doll's stocking on Christmas Eve and Hunca Munca atones for her hand in the destruction by sweeping the doll's-house every morning with her dust-pan and broom.