Twelve-year-old Karl (a friend of Achim's from the orphanage) is really strong but can't cope without his timid friend, who has been adopted by a nice couple and now lives far away. What's the use in being strong, thinks Karl, if you don't have anyone to protect? He is relentlessly teased by the other kids at school, so Karl starts beating them up and is eventually expelled. Spending time alone in his room, Karl daydreams about his father, who he believes is a sea captain who has somehow lost Karl as a baby, but who will one day come and fetch him. But when Maria, who works at the orphanage, admits to Karl that she made up this story to soothe him when he was younger, he decides to run away from his teachers, his peers who tease him, and the people in his life who tell him lies. Thus he embarks on a journey to reach the ocean, become a sailor, and find his father.

On his journey he meets the Tiny Ones, a tribe of adventurers and sailors not much bigger than Karl's little finger. They've lost their ship and would like to borrow the model ship Karl has brought with him on his escape. Karl is magically changed into one of the Tiny Ones and they set sail on an adventure to the Twelfth Continent. On a previous journey here, the children of the Tiny Ones vanished while on a walk one evening. Now, with Karl's help, the Tiny Ones want to find their children again. Throughout his adventures, Karl not only finds the solution to an old riddle on the Twelfth Continent, but also discovers traces of his real father on this very peculiar island with more than one surprise in store for him and his fellow sailors. Full of wit and surprises, The Secret of the Twelfth Continent is sure to captivate children while reinforcing the importance of family and friendship.