The Story is set in the city of Bridlestone, where the protagonist, a young Filly known as Lily Sparrow lives in poverty with her older sister, Rose, and dreams about living in Castle Marefax, the home of Lord Lucius. Their fantasies are cut short when they hear a commotion down at the market. A mare who goes by the name of The great and powerful Trixie is selling 'magical' artifacts, such as a mirror that makes one beautiful (though only in complete darkness) and a magic box that grants a wish. Rose scoffs at the idea of magic, but an old mare named Celestia tells her otherwise, suggesting it may in fact be magic.