"The Mysterious Stranger" is narrated by August Feldner, a sixteen-year-old printer's apprentice. The events of the story take place in 1490, in the small village of Eseldorf, Austria.

August lives and works in a run-down old castle where the print shop is located. Heinrich Stein, a man in his mid-50s and the master of the print shop, is referred to throughout the story as "the master." The master lives in the castle with his wife, Frau Stein, and her seventeen-year-old daughter from a previous marriage, Marie Vogel. The master's sister, Frau Regen, and her seventeen-year-old daughter Marget Regen also live there. In addition to August, there are six other men who work in the print shop and live in the castle: Adam Binks, Gustav Fischer, Moses Haas, Hans Katzenyammer, Barty Langbein, and Ernest Wasserman. A magician by the name of Balthasar Hoffman lives in the...