NOTE: This Spoiler is sent in by Robbie Tan.
The movie begins with a view of outer space, showing different galaxies and millions of stars. A voice explains that there exist several worlds and universes, some running parallel. All these are connected by dust, which is ever present.
There is a world where one’s soul existed outside the body. These are called daemons, the animals that share the thoughts and feelings of their owners. A person without a daemon is like a person without a soul. In this world, altheiometers existed, where, instead of seeking north, seeks the truth. Another name for an altheiometer is the Golden Compass.
This world is shared by the ‘normal people’ with the Gyptians which rule the seas, Witches that fly the skies and the Ice Bears, which rule the north. All authority rests with the Magisterium, who has destroyed all the Golden Compasses, as they deem it a threat to their version of truth and forbade the mention of dust.
Lyra Belaqua is a student of Jordan School, who is a friend to the children of Gyptians and also to Roger, a helper at the school kitchen. One day, Lyra overhears a conversation where a member of the Magisterium is pressuring the College Master to censure Lord Asriel, whose scientific work is undermines many beliefs of the Magisterium. The master disagrees, as he is a proponent of free speech and freethinking.
Lord Asriel has just come back from an expedition from the north. He is evidently not cowed by the authority of the Magisterium. Lyra saves him from drinking poisoned (by the Magisterium member) Tokay and seems unsurprised that the Magisterium is trying to kill him.
Lord Asriel makes a presentation to the College where he shows a pictogram of dust from the sky entering a man through his daemon. He makes pointed statements of the existence of several parallel multiverses, some of whom may not have a Magisterium. Despite the ‘heretic’ statement from the Magisterium, the College still provided the means to fund Lord Asrael’s travel back north, where the picture was taken.
Lord Asrael and Lyra (his niece) walk through the school grounds. Lord Asriel hints of more trouble for the Magisterium but orders Lyra to stay in school. He is sharp when Lyra mentioned dust, saying that Lyra should never talk about it.
Lyra and Roger talk about gobblers, people deemed responsible for the rash of disappearing children. Most of the children were Gyptians, orphans and the poor. Lyra and Roger promised each other to seek out the other if one of them disappeared, as Roger is just a kitchen helper and Lyra is an orphan.
A secret meeting at the Magisterium reveals that a plan is being hatched to eliminate future freethinkers and other troublemakers by inoculations. This will make future citizens more compliant to the authority of the Magisterium.
A dinner at the college is graced by Mrs. Marisa Coulter, a member of the Magisterium and who is obviously someone with a lot of power, as the College heads are all awed by her. She takes a liking to Lyra, and sweetly ‘persuades’ the Master to let Lyra come with her. She tells Lyra of her meeting Ragnar, the Ice Bear King, and Ragnar’s secret wish. Despite the Master’s statement regarding strict instructions given to the College by Lord Asriel her uncle, Mrs. Coulter is unfazed and insisted on taking Lyra.
The College master is uncomfortable with Lyra going to Mrs. Coulter. He mentions that Lyra could be the special girl prophesied by the Witches.
The College Master secretly visits Lyra’s room before she goes to Mrs. Coulter. He gives her the only surviving Golden Compass, a gift from her Uncle Asriel to the College several years ago. He cautions her about showing the Compass to anyone, especially Mrs. Coulter.
Two of Lyra’s friends, Billy and Roger, go to the College one night to ask Lyra on a bet they made. However, both were captured by Mrs. Coulter’s daemon monkey and the gobblers.
Lyra missed Roger as she was leaving the College. Mrs. Coulter took Lyra in her balloon ship, which gives Lyra a spectacular view of the city. Lyra points at the capital building of the Magisterium, where all authority rests.
Lyra is given a warm welcome at Mrs. Coulter’s huge home, where every comfort was offered to her. However, Pan, Lyra’s daemon, feels caged in by the mansion’s rules and feels that they are prisoners of Mrs. Coulter. Lyra felt the hard discipline of Mrs. Coulter one night and, in defiance, surreptitiously enters Mrs. Coulter’s private room. She finds evidence of Mrs. Coulter’s connection to the gobblers and finds out that her friends Billy and Roger were taken.
She escapes the mansion as she barges in on Mrs. Coulter’s daemon monkey trying to steal the Compass. Gyptians save her from the gobblers and bring her to the Gyptian king, John Faa. The King promises to save the missing children and strike a blow to those responsible. Lyra is taught how to use the Compass by a Gyptian elder, Farder Coram. The Compass tells them that the children are held in a place of death, symbolized by a building with a skull on top.
The kidnapped children are shown in side a center located in the frozen north. Billy, the Gyptian boy, shows spirit in defying some of the center’s activities and insists only in telling the truth.
Lord Asriel, reaches the kingdom of the Ice Bears. He falls to an ambush to men serving the Ice Bear king, Ragnar.
Mrs. Coulter sends two mechanical insects to find Lyra. Asked by the Magisterium member, she is skeptical that Lyra could use the Compass, let alone the special girl in the Witches’ prophesy.
The member reports to the head of the Magisterium of Mrs. Coulter’s progress. The Head, however, sent Mrs. Coulter north to get Lyra. Mrs Coulter, inside her airship, looks at a picture of Lyra and whispers “I will never hurt you”, over and over.
The insects find Lyra in the Gyptian flagship going north. One insect escaped and the other was captured. The insect bore a sleeping drug which they can inject their victim.
The Witch Queen, Serafina Pekkala, visits Lyra in the Gyptian flagship. She tells Lyra that the children are located in Svergald, near the kingdom of the Ice Bears. The center is guarded by a battalion of Tartar soldiers, making it a virtual fortress. The Witch Queen advised Lyra to go to a certain town and enlist some help.
At the port, Lyra befriends Lee Scoresby, an aeronaut. Both of them are looking for their missing friends and have come to help them. Lee advised Lyra to enlist the aid of an Ice Bear to help her in her quest. Lyra finds the Ice Bear Iorek Brynisson, working as a laborer for whisky. Iorek tells Lyra that without his armor, he is unworthy of being called an Ice Bear. Lyra uses the Compass to learn that Iorek is a deposed prince and tells him where to find his armor. Iorek rushes to don his armor (inside an office of a Magisterium building) and pledges his ‘contract’ to help Lyra.
At the camp one night, Lyra reads the Compass and asks Iorek to help her to a ghost house that seems to be a key to their quest. They arrive to find Billy, the Gyptian boy, but without his daemon. Billy seems to have lost his spirit. Lyra concludes that the gobblers are stripping the daemons away from the children, an incredible crime.
Their camp was ambushed by the men of Ragnar and took Lyra to the Ice Bear palace. Lyra meets Ragnar and remembers from a conversation with Mrs. Coulter that Ragnar wanted a daemon more than anything else. Lyra tricks Rganor into thinking she was Iorek’s daemon and in order to have her as his daemon, he must defeat Iorek in single combat.
Iorek arrives and approves Lyra plan. He and Ragnar battle each other ferociously, the Ice Bears watching animatedly. Iorek wins and kills Ragnar. He is now the king.
Ierich and Lyra approach the center but they were separated as the ice bridge to the center collapses. Lyra proceeds to the center alone and she finds Roger. Mrs. Coulter arrives at the center and Lyra overhears that Lord Asriel is free and working in a secret laboratory. However, Magisterium troops are already on the way to arrest him and sentence him to death.
Lyra was discovered by the center ‘doctors’ and was placed inside the inoculation chamber. As Pan slowly disintegrates, Mrs. Coulter rushes in and saves them from being permanently separated from each other.
Mrs. Coulter reveals that she is Lyra’s mother, who was taken from her as she was unmarried the day she bore her. She promises her protection but Lyra doesn’t believe her. She tricks Mrs. Coulter in releasing the mechanical insect and Mrs. Coulter was stung asleep. Lyra then destroys the inoculation chamber (and starts a chain reaction) and leads the children out.
A battalion of Tartar soldiers and their ferocious wolf daemons bar the children’s path. As Lyra was about to be set upon by the wolf daemons, Iorek charges in and kills some of the soldiers. The children try to escape in the confusion. The Witch Queen saves Lyra and Witches strike against the soldiers. The battle is joined by the Gyptians and Sam. The soldiers were annihilated. The Gyptians are families are reunited, Faa bows his thanks to Lyra.
Roger joins Lyra in her quest to save Lord Asriel from the Magisterium. Flying in Sam’s airship, Iorek, the Witch Queen Serafina and Roger join in Lyra’s quest to help Lord Asrael and save the world from the Magisterium.