In a fairy tale, Princess Moanna, whose father is King of the Underworld, visits the real world, where the sunlight blinds her and erases her memory. She becomes mortal, then, and eventually dies. The King is certain that her spirit will someday return to the Underworld, so he builds labyrinths throughout the world to act as portals. In 1944, in Francoist Spain, ten-year-old Ofelia (Ivana Benquero) travels with her pregnant and ailing mother Carmen (Aridna Gil) to meet Captain Vidal (Sergi Lopez), her new stepfather. His own father was a famous Commander who died in Morocco and he is a strong believer in fascistic Falangism. His job is to hunt down republican rebels.
A large stick insect, which Ofelia believes is a fairy, leads her into an ancient stone labyrinth, but she is stopped by her housekeeper Mercedes (Maribel Verdu), who is a secret supporter of the rebels, including her brother Pedro (Roget Casamajor). That night, the stick insect appears in Ofelia’s bedroom and transforms into a fairy to lead her into the labyrinth, where she meets a faun (Doug Jones) who believes she is the reincarnation of Princess Moanna. He gives her a book and tells her she must complete the three tasks inside to become immortal and return to her kingdom.
Ofelia completes the first task when she retrieves a key from the belly of a giant toad. But she is now worried about her mother’s condition. With three fairy guides and a piece of magic chalk, she retrieves a dagger from the lair of the Pale Man (also Doug Jones), who is a child-eating monster with eyes in his hands. Though warned not to consume anything from his feast-table, she eats two grapes and the Pale Man awakens. He devours two of the fairies and attacks Ofelia, but she escapes. The faun is infuriated and refuses to give Ofelia the third task.
She is aware of Captain Vidal’s ruthlessness. He murders two farmers suspected unfairly of hiding the rebels. He interrogates and tortures a captive. He gets Doctor Ferreiro (Alex Angulo) to euthanize the rebel, then kills the Doctor as a collaborator. Then he catches Ofelia using fairy medicine, hiding a mandrake root under her mother’s bed. It is actually curing her but the Captain is incensed. Carmen throws the root into the fire and suddenly develops painful contractions and dies giving birth to Vidal’s son. Mercedes is found to be a spy. Ofelia is locked in her bedroom and Mercedes is taken to be interrogated and tortured. Mercedes manages to free herself and stabs Vidal, but not lethally. The faun has changed his mind about giving Ofelia the third task and tells Ofelia to bring her newborn brother into the labyrinth. She does that as Vidal pursues her and the rebels launch an attack.
Ofelia meets the faun, who suggests drawing a small amount of the baby’s blood as the blood of an innocent is required, but she refuses to do so. Vidal finds her with the faun but cannot see the creature. Vidal takes the baby away and shoots Ofelia. When he leaves the labyrinth, he is surrounded by rebels, including Mercedes and Pedro. He gives the baby to Mercedes and asks that his son be told about his father. Mercedes says the child will never even know his father’s name. Vidal is shot dead.
Mercedes enters the labyrinth to comfort Ofelia, who is dying. Drops of Ofelia’s blood trickle down to an altar. Ofelia appears uninjured in a golden throne-room. The King of the Underworld tells her that by choosing to shed her own blood she has passed the final test. The Queen of the Underworld invites her to sit next to her father and rule. Ofelia dies in Mercedes’ arms. In the epilogue, we learn that Ofelia ruled the Underworld wisely for centuries and her influence can be found in this world too, if one knows where to look.
The film was written, directed, and co-produced by Guillermo del Toro, who considered it a companion piece to his The Devil’s Backbone (2001) In fact, the rebels shot in the woods are the surviving orphans from the earlier film. Doug Jones plays a faun, but not specifically Pan. Del Toro thought Pan too erotic for a film about a young girl. It appeared at the 2006 Cannes Film Festival, where it received a 22-minute ovation, then it opened to widespread critical acclaim. It was a box-office success and won three Oscars, three BAFTAs, two Saturns, and a Hugo. It was the best-reviewed film of the 2000s on Metacritic and has a 95% approval rating on Rotten Tomatoes. A sequel was contemplated but cancelled, perhaps wisely.
Del Toro changed the age of Ofelia when he discovered Ivana Benquero and she had even the cameramen in tears at her first reading. He deluged her with comics and fairy tales. Del Toro insisted that Doug Jones be in the film. He learned the dialogue in Spanish, studying during the five hours a day in the makeup chair. Though his lines were eventually dubbed by Pablo Adan, an experienced Spanish theatre actor, Jones’ research made this more successful. The story came out of a notebook of doodles, ideas, and notes that del Toro kept adding to for twenty years. He left the book in a cab and the driver tracked him down at his own cost to return it to him.
The faun had appeared to him in his lucid dreams as a child, stepping out from behind a tall clock at midnight to talk to him. He also found inspiration in Alice in Wonderland, the books of Jorge Luis Borges and Lord Dunsany, and the images of Goya and Arthur Rackham. Del Toro wrote the English subtitles himself, after some horrible disappointments. Stephen King, sitting next to him at a showing, became agitated by the Pale Man chasing Ofelia. Del Toro turned down the directorship of The Lion, the Witch, and the Wardrobe to do this one, and gave up his salary. The ruined town at the beginning of the film was a genuine ruin from the Spanish Civil War, never rebuilt. It appeared in Terry Gilliam’s Adventures of Baron Munchausen.