The stories take place in an enchanted wood in which a gigantic magical tree grows – the eponymous 'Faraway Tree'. The tree is so tall that its topmost branches reach into the clouds and it is wide enough to contain small houses carved into its trunk. The wood and the tree are discovered by three children named Jo, Bessie and Fanny (later updated to Joe, Beth and Frannie), who move into a house nearby. They then go on adventures to the top of the tree.