On one of their infrequent visitations, siblings Sadie and Carter take a nice trip to the British Museum in London with their Egyptologist father Julius Kane—during which he blows up the Rosetta Stone, releasing five imprisoned ancient Egyptian gods: Isis, Osiris, Horus, Set, and Nephthys. Set, generally not known to be a nice guy, imprisons Julius in a tomb and makes cryptic remarks to Carter and Sadie before vanishing.
Sadie and Carter's uncle, Amos, steps in and brings the kids to New York, revealing that they come from a line of ancient Egyptian magicians and need to be brought up to speed. Amos disappears while gathering info on Set's nefarious plans, and Set's minions attack the kids and Amos's baboon sidekick Khufu. The cat goddess Bast comes to their rescue and carts the kids around until Zia, a teenaged magician from the House of Life, brings Carter and Sadie to the magicians' headquarters in Egypt.
Turns out the kids are in deep, as they're suspected of being "godlings," or hosts for the escaped gods Isis and Horus. Though ancient Egyptian magicians and pharaohs used to work with gods, in the last few thousand years, the magicians decided to imprison and outlaw the gods. Seeing that they might be condemned to death, Zia lets Carter and Sadie escape. Bast escorts them on a quest to figure out how to defeat Set, who is constructing a giant red pyramid in Phoenix, Arizona, in order to focus his power and destroy a good chunk of North America.
Sadie and Carter come to terms with the gods inside them and meet other deities, such as Anubis (the god of funerals), Nut (the sky goddess), Geb (the earth god) and Thoth (the god of wisdom and knowledge). They battle various demons while gathering the ingredients for a ritual to defeat Set. They bicker like siblings do. Bast provides comedic relief but also key information, like the fact that Ruby Kane died while trying to bring the old gods back into the world.
Things come to a head in Phoenix, where Zia joins Carter and Sadie, despite the fact that magicians and gods are supposed to be at odds. The kids must simultaneously battle Set, who's super powerful, and let their father fully merge with Osiris by dying and becoming god of the underworld. They realize partway through the battle that Set is being controlled by Apophis, the primal force of chaos, so since he's the real enemy, they don't have to destroy Set. They merely bind him long enough to get him to knock off that blow-up-North-America nonsense.
The magicians of the House of Life, who had been battling Set, are close to destroying Sadie and Carter for being godlings. Their leader, Desjardins, is especially stuck on the whole thing, but he lets Sadie and Carter go with a warning after they consciously choose independence from Isis and Horus rather than continue to let the gods rule them and use their bodies. So the book ends with a compromise: Sadie and Carter have refused the limitless power that Isis and Horus could offer them, deciding instead to learn how to be magicians before getting back with the gods. Sadie and Carter decide to find others like them, and, with Bast's help, they attempt to learn the way of the ancient gods once again.