All of the classic fairy tales and other stories exist together in the same continuity, though many of the events play out slightly differently to how the stories are told in our world. The structure of the show cuts back and forth between the events happening in the real world and the corresponding events that happened in the fairy tale world.
On the night of her 28th birthday, bail bonds collector Emma Swan is reunited with Henry Mills—the son she gave up for adoption ten years previous—who takes her back to his hometown of Storybrooke, Maine.
Henry possesses a large book of fairy tales, suspecting that Emma is the daughter of Snow White and Prince Charming, who sent her away so she would be protected from a powerful curse enacted by the Evil Queen, a curse in which the queen is the only one with a happy ending. Because of the curse, everyone in Storybrooke is frozen in time with no memories of their former selves—except for the Queen, who is Storybrooke's mayor and Henry's adoptive mother, Regina Mills. Emma of course considers this theory to be completely outlandish and returns Henry home, but she still decides to remain in the New England town after becoming attached to him. This action causes the hands of the clock tower to move for the first time in 28 years. Henry also tells Emma that they are the only people who can leave Storybrooke, as others who try will suffer accidents.
In the fairy tale world, it is revealed that Snow and Charming, concerned for the safety of their unborn child, went to seek advice from the imprisoned trickster Rumplestiltskin. In exchange for the child's name, he told them their only hope was the child, who would return on her 28th birthday and begin "The Final Battle". The child, an infant girl, is born on the day the Queen enacts her curse and is placed in a wardrobe carved out of an enchanted tree which takes the child to our world, where she grew up in the foster system, rebelled in her teen years, and ended up having Henry at 18.
In Storybrooke, Emma is soon elected as Sheriff following the sudden death of the previous Sheriff, Graham Humbert, believed by Henry to be the Huntsman. Regina's antagonistic attitude raises Emma's suspicions and prompts her to move in with Henry's teacher Mary Margaret Blanchard, believed by Henry to be her mother, Snow White. Regina's bitter rivalry with Storybrooke's wealthiest resident, Mr. Gold, becomes heated when she learns he is still aware of his true identity as Rumplestiltskin. Mary Margaret falls in love with David Nolan, a coma patient who is really Prince Charming. David wakes up after she reads Henry's fairytale book to him as a favor to Henry. David, however, is married to Kathryn Nolan, the woman who is (in the fairy tale world) his ex-fiancée Princess Abigail, daughter of King Midas. Unable to deny their love, David and Mary Margaret soon begin a secret relationship that becomes public and upsets Kathryn.
Kathryn eventually decides to go to Boston and let David be with Mary Margaret only to disappear before leaving Storybrooke. Sometime later, an antique jewelry box that belonged to Mary Margaret when she was a child is found buried near the old toll bridge and is revealed to contain a human heart, which is proven to be Kathryn's via DNA testing. Mary Margaret is arrested for Kathryn's supposed murder and hires Mr. Gold as her attorney. As Mary Margaret is about to be prosecuted by corrupt District Attorney Albert Spencer, Kathryn is found alive in an alley. It is revealed that Regina and Mr. Gold plotted to frame Mary Margaret and force her out of Storybrooke, but Mr. Gold double-crossed Regina and let Kathryn go to exonerate Mary Margaret. When Daily Mirror chief editor Sidney Glass, previously the Magic Mirror, confesses to having abducted Kathryn to jump-start his career, Emma is not convinced. She concludes that Regina orchestrated the conspiracy and forced Sidney to "confess".
Emma soon discovers that writer August W. Booth, who is the first stranger ever to arrive in town after she did, is from the Enchanted Forest as well: he is Pinocchio, who was sent to our world through the same wardrobe that brought Emma to watch over her. He abandoned her out of fear and is slowly turning back into a wooden puppet as a result. Emma then attempts to take Henry out of Storybrooke forever but is then forced to reconsider when he refuses to go. She finally makes a deal with Regina, in which she agrees to leave but will still get to visit Henry on occasion.
Since Regina knows Emma's true identity, however, she retrieves her poisoned apple (the same one she used on Snow White) to use on Emma in the form of an apple turnover. Henry, desperate to prove to Emma that the curse is real, takes a bite of the turnover and collapses to the floor unconscious. Emma, who now starts to believe after seeing flashbacks of her true past, is forced to ally with Regina to save Henry and retrieve Rumplestiltskin's true love potion from Maleficent, imprisoned as a dragon underneath the Clock Tower. After slaying the dragon, Emma heads back to save Henry, but Mr. Gold intervenes and steals the potion, leaving Emma halfway up the elevator shaft and Regina tied to a chair and gagged.
When Henry is pronounced dead, Emma and Regina return to the hospital to say goodbye to his body. Emma kisses him on the forehead, causing a pulse of energy to engulf the entire town and restore everyone's true memories while freeing Henry from the effects of the poisoned apple. Snow and Charming reunite with each other, and Regina returns to her mansion alone as Emma begins to wonder why no one is returning to the Other World since the curse is broken. Rumplestiltskin reunites with his true love Belle and takes her to a Wishing Well deep in the heart of the forest, a well with the power to restore that which one had lost. He takes the potion and drops it into the well, causing a purple cloud to emerge and consume Storybrooke as the clock strikes 8:15.