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Young genius Matilda Wormwood is neglected and mistreated by her used car salesman father Harry and stay-at-home mother Zinnia, and her older brother, Michael. Smart and independent, she finds solace in the fictional worlds of books at the public library. When Matilda's parents refuse to enroll her into school, she puts bleach in her father's hair tonic and glues his hat to his head. Harry catches Matilda reading Moby-Dick, rips it up, and forces her to watch game shows on television. Matilda becomes increasingly enraged until the television explodes.

Harry sells a car to Miss Agatha Trunchbull, the tyrannical principal of Crunchem Hall Elementary School, in exchange for admitting Matilda as a student. Upon her first day, Matilda meets Hortensia and warns her about the headmistress's ways and watches Ms. Trunchbull in horror as she swings a girl named Amanda Thripp around by her hair and hammer throw her over a field of flowers as punishment for having her hair in pigtails. Matilda's teacher, Miss Jennifer Honey, notices the ease with which Matilda answers middle school multiplication questions and requests Matilda be moved to a higher class, but Trunchbull refuses and proceeds to tell Miss Honey if she cannot handle Matilda herself, that Ms. Trunchbull would lock her in the chokey. The Wormwoods are not interested either and disrespectfully kick her out. Trunchbull has the whole school watch her forcing a boy named Bruce Bogtrotter to eat an entire enormous chocolate cake as punishment for stealing her piece of chocolate cake from the school kitchen. Matilda leads the junior and senior students in cheering Bruce to success, and Trunchbull gives them all five hours detention as a punishment. Matilda discovers her father is under surveillance by the FBI over his illegal dealings. Her parents refuse to believe her as Zinnia flirts with the two agents whom she believes are speedboat salesmen.