A warning from Ace sends the Doctor, Roz and Chris to Paris in 1897, where a time rift is threatening to destroy the city. Chris uses forged documents to infiltrate the Prefecture, while the Doctor and Roz search for psychics who may be attuned to the forces unleashed in the city. Roz meets a young American artist, David Clayton, who like many other artists in Paris has been having unsettling dreams of an evil doll's house. His lover Claudette takes him to Dr August Mirakle, who refers him to the monk Brother Tomas; Roz follows at a distance, and sees Tomas using a chair from the haunted doll's house to transform David into a werewolf-like creature. Claudette arrives to inquire after David, and Tomas uses the chair to transform her into a waif-like beauty. Tomas captures Roz and sends Claudette and David to infiltrate his enemy Montague's army of monstrosities, artists whose bodies Montague has twisted into grotesque new forms. Before they can kill him, Montague sees through their deception, reconditions them and adds them to his monstrous Brotherhood.

Montague then orders an artist named Jean Veber to kill Emil Montfalcon, a young man from a Family who betrayed him and stole his Doll's House. Emil has tried to cut ties with the Family, but he still wishes familiar things about him and has thus purchased a house where the Family used to live. The psychic residue within the house stirs up uncomfortable memories, however, including one memory of his father on fire in his workshop -- something that never happened. Veber tries to run down Emil in the street, but at the last moment Emil uses his psychic powers to transfer his mind into Veber's body as his old body is crushed beneath the carriage wheels. Emil takes the body into the house and cuts it up to avoid identification, and flees, as his powers -- dormant but slowly returning -- start to transform his body into the image of his old one.

Chris, mistrusted as a new arrival, is assigned to work with Inspector Anton Jarre, who has fallen out of favour recently. Like the infamous Dreyfus, Jarre was a member of the Shadow Directory, which mysterious forces within the government have discredited and disbanded. For political reasons Jarre is unable to investigate the death of prominent politician Jean Mayeur; he is instead reassigned when Emil's former body is found. An autopsy reveals that tiny pinpricks of material are missing from the dead man's brain, but once again Jarre is removed from the case by his superior Major Henri before he can learn anything. Henri learned of the new case surprisingly quickly, and the suspicious Jarre concludes that Chris is a spy for the enemies of the Shadow Directory -- and determines that his credentials are forged.

In a different kind of space, following the destruction of their home space, a race called the Quoth has found a new home in strange distant Clusters of birthing material. However, ever since they began mining the Clusters they have been suffering from inexplicable urges which force them to perform acts they don't understand. Some Clusters are simply Shadowed -- others have been Blighted, the Quoth within trapped in permanent Shadow. A new Quoth is shaped, named Truthseeker, and it pledges to find the cause of the Shadow and the Blight. Little is known about the Clusters themselves; all that has been determined is that the residue from the act of mining birthing material somehow transforms neighbouring matter into birthing material as well.

Tomas, believing that Roz is one of Montague's assassins, orders Mirakle to recondition her and send her after Montague. The attempt fails, and Roz, woken back to her own identity, is pursued through the sewers by Montague's monstrosities. She escapes with the help of the blind sewer worker Philipe Duval, who leads her back to Tomas' monastery. Meanwhile, Tomas, realizing that Roz has failed, uses the haunted chair to generate a clone of himself, with which to decoy Montague while he escapes. The clone, however, is too much like Tomas himself, and although Montague offers a "merciful" death suiting his enemy the Grandmaster, Tomas refuses. Montague thus crucifies him alive, and the agony of the protracted death passes along the psychic link between Tomas and his clone. Tomas is thus left vulnerable, and dies when Roz stumbles across the scene and shoots the clone out of pity. She is then recaptured by Montague.

The Doctor tracks down Francesque Duquesne, a mental patient who used to be the curator of the Shadow Directory's museum of antiquities; when the Doll's House was stolen, he suffered a nervous breakdown brought on by exposure to the psychic residue left by it. Duquesne reveals that the Shadow Directory has known of the Doctor's existence since finding Ace's abandoned diary, and tells the Doctor about a toy shop he's seen in his dreams where the Doll's House may be found. He then attempts to turn the Doctor over to Henri, yet another agent of the Grandmaster, but at that moment Tomas dies and the soul of the Grandmaster seeks out a new home. The Doctor senses the approaching forces, and taps into Duquesne's psychic potential to ensure that when the Grandmaster tries to transfer into Henri's body, the body psychosomatically suffers the same wounds as the crucified Tomas. The Doctor departs, and Duquesne tries to flee from the hospital, but an unfortunate nurse taking a short-cut stumbles across Henri's dying body. He kills the nurse and feeds on her limited psychic potential, giving him just enough strength to track down Duquesne and do the same to him, thus restoring himself to full health.

The Doctor finds the toy shop, where Emil, in Veber's body, is preparing to make peace with his estranged father Dominic. At first Dominic assumes them to be intruders, and from the Doctor's double heartbeat concludes him to be one of Montague's monstrosities. He attempts to use his pyrokinetic powers to kill them, but Emil manages to distract him and the Doctor knocks him out. Emil, overwhelmed by his proximity to the Doll's House, passes out and has a vision of the Quoth. Meanwhile, Mirakle, trying to extract himself from the sick games of the Grandmaster and Montague, attempts to report the conspiracy to the Surete, but a bored policeman concludes that he's just a troublemaking Jew like Dreyfus and locks him up. Mirakle is then hunted down and killed by one of Montague's living dolls.

Jarre leads Chris into a trap and questions him, threatening him with an alien gun from the Shadow Directory's archives. Chris is forced to admit that he's a policeman from the future, and Jarre concludes that he must be the legendary Doctor. Chris chooses not to correct him. Jarre invites him to help investigate Tomas' death, but upon entering Tomas' monastery they trigger a psychic trap which transforms Jarre's psychic associate Kaspar into a monster. Jarre shoots him with the gun, which drains away all of the psychic force in Kaspar's body. In a hidden room beneath the monastery, Jarre and Chris find a set of mannequins carved to resemble members of the French government, plus one face which Jarre doesn't recognize. All of the politicians depicted here recently changed their political stances -- just as Tomas did after a visit from the late Jean Mayeur.

When Dominic awakens, he finally recognizes his son and regrets his actions. He explains to the Doctor that Montague was a lone madman in England when the Shadow Directory took the House from him, but Montague retained some of its power. An ambitious politican named Jean Mayeur learned of his plight, and in return for power of his own, used his influence to break the Shadow Directory and return the House to Montague. Mayeur became the Grandmaster of a psychic Brotherhood formed with his fellow Freemasons, while Montague became steadily more paranoid and manic. Convinced that Mayeur was out to kill him, he killed Mayeur instead, but Mayeur transferred his mind into the body of Tomas and has been leading the Brotherhood behind the scenes ever since. Montague, meanwhile, has taken artists drawn to him by his psychic powers and has transformed them into monsters, claiming to be unleashing their full aesthetic potential.

Dominic is one of the leaders of the Family, a faction of Montague's former followers who broke away from him and attempted, despite their deformities, to breed true. Dominic managed to steal the Doll's House from Montague and has been hiding it in plain sight in his toy shop ever since. The Doctor recognizes the House as a model of the haunted Ilbridge House, itself a powerful psychic resonator -- but still not powerful enough to explain the extraordinary powers granted to those in its vicinity. While Dominic takes the Doctor to meet the rest of the Family, Emil remains in the toy shop in case Roz or Chris should attempt to contact the Doctor -- and collapses in agony as a black circle emerges from his chest and plunges into the House.

Having somehow been brought close to Quoth Space, Truthseeker has analysed its structure and found it to be hollow within, and has concluded that it must be the source of the Shadow and Blight. He leads his fellow Quoth to construct a War with which to destroy the Blighted Quoth, but upon arriving in Quoth Space, he eventually realizes that there is no Blight here and that he has killed thousands of innocent Quoth in error. He disbands the War and turns himself over to the Quoth for judgement, but they reveal that Quoth Space is now empty of birthing material and order him to build more Wars with which to destroy the Blighted Clusters. He is renamed Warleader, and the black circle returns to Emil's chest.

The Doctor meets Dominic's wife Clarissa, who appears to be decades older than she really is, and sends Dominic back to fetches Emil, whose shape-shifting abilities are vital to his plan. Meanwhile, Roz awakens to find herself Montague's prisoner, and when he tortures her for information she plays upon his superstitious fears, claiming to be an agent of the Doctor, who is himself an avatar of the dark gods. Duval, the blind sewer worker, arrives to rescue her just as the Doctor, Dominic and Clarissa arrive to attack Montague. Montague, however, realizes that Clarissa is turning aside his aesthetes' attacks by manipulating Time, and does the same, altering history so that the Doctor and his friends are captured. Dominic finally reveals that he's been working with the Grandmaster for years, sacrificing members of the Family in order to keep Montague occupied. He has done so ever since his wife gave up twenty years of her life to save him, when his power ran out of control and he nearly set himself on fire after hitting his thumb with a hammer. The Doctor warns them that the use of this power has created the time rift which threatens to destroy Paris. Montague arrives to confront the Doctor, who suddenly transforms into a giant demon, avatar of the dark gods -- but as Montague flees in terror, the "demon" admits to the shaken Roz that he is in fact Emil.

Henri arrives in the Masonic temple above Montague's domain, but the Doctor ambushes him and takes his place. Montague is dying, having pushed his powers beyond their natural limits, and the Doctor tries to trick him into surrendering; but Montague sees through the trick, finds the real Henri and kills him. As Montague's creatures attack the others, Emil collapses again, and black circles emerge from his chest and carve through the flesh of the attacking monsters. The Doctor, realizing the truth, fetches the TARDIS and takes Emil inside. Warleader and the other Quoth are thus cut off from the rest of the Clusters, and the Doctor is able to use the TARDIS console to allow Emil and the Quoth to communicate. The Quoth are in fact subatomic life forms, no larger than strings of quarks, and their "birthing material" comes from the psychic nodes of the human brain. The process of mining it results in subatomic reactions which create more psychic nodes, thus making their human hosts more powerful, and mental feedback has enslaved the Quoth, forcing them to carry out the inexplicable commands of their human hosts. Emil, now aware of the injustice that his people have committed, gives his word to put an end to it with Warleader's assistance.

Chris and Jarre confront Jules Balmarian, one of the politicians seen carved upon the mannequins, just as Henri dies and the Grandmaster's consciousness passes into Balmarian's body. In the ensuing struggle, Jarre accidentally shoots Balmarian with the alien gun, completely erasing the Grandmaster's influence from his mind. Realizing that the gun is a psychic storage unit, Jarre and Chris take it to the Palais Bourbon and use the gun on all of the affected politicians. The gun then overloads before they realize what's happening, but moments before it can explode and destroy Paris, more Quoth Wars arrive and absorb the Quoth within the gun, freeing them without having to kill the politicians they had been inhabiting.

Claudette emerges from the fight and shoots Montague, partly due to Tomas' conditioning and partly due to her own hatred of what Montague had done to her. Montague is no longer able to control the dying, Blighted Quoth within him, and thus the bullet strikes and kills him. The Doctor returns to the sewers and uses the chair from the Doll's House to remove all of the Quoth from their human hosts, but at the last moment Philipe Duval is revealed to be the last remaining host of the Grandmaster. He attempts to seize the chair from the Doctor, and it is broken in the struggle. Roz reluctantly volunteers to host the Quoth until they can be delivered to safety.

Before removing the Quoth from Earth, the Doctor has them restore Montague's followers to human form, although their mental scars may never heal. Chris admits to Jarre that he's not the Doctor, and the Doctor advises Jarre that the Shadow Directory should stop observing him, lest he should have to observe the Shadow Directory. He then takes the Quoth to a neutron star where they will be able to achieve their full potential; their original home must have been a similar neutron star, destroyed by some cosmic catastrophe. After drifting through space they eventually found a new home on Earth, in the psychic resonances of the Ilbridge House model, only to be enslaved by Montague and the Brotherhood; but at last they are free.