Leslie Burke not only beats all the boys in the races on the first day of school, but she continues to win. On the last day of that week, they decide to end the races all together for the rest of the school year.

Jesse, instead, starts to look forward to Friday music class with Miss Edmunds. She had stopped him in the hallway to ask about his drawings and requested to see some of them. He is still in love with her, so Fridays remain the highlight of his week.

While singing in music class, Jesse decides Leslie isn't so bad after all, he smiles at her, which she returns and their friendship blooms. He feels as if his life has suddenly taken a turn for the better.

On the way home that day, Jesse learns Leslie's parents aren't poor like most of the people in Lark Creek. They moved to Lark Creek to live a simpler life, but they didn't expect the other children's reaction to Leslie. Because she dresses and acts differently she is teased and ostracized, which makes her grateful for Jesse's friendship.

One day, after Mrs. Myers reads an essay Leslie wrote about her hobby, scuba diving; she tells the class they must watch a television show about the sea and write a report. Leslie's problem is her family doesn't own a television set. She tells the teacher about her predicament in front of the class, which leads to her being teased mercilessly at recess.

On the way home, Jesse protects her from a seventh-grade girl who is a bully. Leslie afterwards asks Jesse to come and play at her house. Together they go out to the woods behind her house and find a rope tied to a tree, which they use to swing out over a gully.

Leslie thinks the two of them need a secret place to call their own; somewhere they can form a magical land and be the rulers. They find an area on the other side of the gully. Leslie names it Terabithia and they use found wood to build their castle. This is the one place where they both feel safe. Jesse feels at Terabithia he can do anything and he likes talking to Leslie, because she opens a whole different world to him.

Her parents are writers, who are successful, which means Leslie has had different opportunities given to her. Jesse's father doesn't like him hanging out with a girl, he worries about what will happen to Jesse. Jesse's mother doesn't like Leslie, because she thinks her clothes are "tacky" and her hair is too short. Jesse doesn't feel comfortable at Leslie's house, because her parents are so smart and they make him feel dumb.

Even though Leslie makes up stories of giants who rage against Terabithia, the real giant is Janice Avery. She and her friends, Wilma Dean and Bobby Sue Henshaw, take lunches, hopscotch rocks, and lunch money from little girls.

So, on the day Jesse's sister, May Belle, loudly proclaims to everyone on the bus she has Twinkies in her lunch box, they know May Belle will probably be relieved of her treat. Jesse tries to warn his sister to keep quiet about her special snack, but she won't listen to him.

At recess, she is in tears as she tells Jesse and Leslie, Janice Avery took her Twinkies. She wants her big brother to tear Janice into little pieces for taking the Twinkies, but the principal, Mr. Turner, is especially hard on boys who fight girls. They convince May Belle to let them get even with Janice another way.

They brainstorm some different ways to attack Janice, until Leslie comes up with a foolproof plan. She asks Jesse if Janice has a crush on any of the boys at school. He tells her every girl in the seventh-grade likes Willard Hughes. Leslie and Jesse put her plan into action.

First, she has Jesse write a note to Janice, from Willard professing his love for her. He tells her to skip the bus that day so he can walk her home. The walk is several miles long, but he wants to use the time to talk about them as a couple. The note tells Janice not to tell anyone he wrote her, which ensures she will tell everyone about the note. The whole point of Leslie's plan is to embarrass Janice, something she know Janice cannot stand to have happen to her.

Jesse manages to plant the note in Janice's desk before school starts the next day. Jesse and Leslie watch at recess as Janice and her two friends strut around the playground feeling pleased about Janice's new love. Then at the end of the day, it is noticed by the other students that Janice is not on the bus. Her friend, Wilma Dean, tells everyone about Janice's big date, which is why she will not be riding the bus. Then one of the other kids informs Wilma he just saw Willard Hughes sitting at the back of a bus, as it left the school.

The next day, Janice is extremely angry when she boards the bus. Leslie and Jesse are careful not let their facial expressions give them away as the culprits who planted the note. May Belle starts to figure out what her brother and his friend did for her. She is told the truth, but cautioned to keep it quiet, because Janice will kill them if she finds out they are responsible for her humiliation.

Leslie and Jesse bond during music class. Jesse allows himself to befriend the outcast in school, which rewards him with a friend who is always there for him. They create their own country, Terabithia and from there spin tales and encourage each other. They also help May Belle take revenge against the bully who stole her Twinkies.