The story begins with a series of letters between Nathanael, his fiancée Clara, and her brother Lothar. Nathanael describes a childhood fear of a creature called The Sandman who was said to come at night and steal the eyes of children, which intermingled with a the appearance of a man named Coppelius in his father's room some nights to work on what appears to have been alchemy. This man once attacked Nathanael, threatening to take his eyes, and later killed his father before disappearing.