Sixteen-year-old Frank Cauldhame observes many shamanistic rituals of his own invention and it is soon revealed that Frank was the perpetrator of three deaths of children within his family before he reached the age of ten himself.

The 'Wasp Factory' of the title is a huge clock face encased in a glass box and salvaged from the local dump. Behind each of the 12 numerals is a trap which leads to a different ritual death (for example burning, crushing or drowning in Frank's urine) for the wasp that Frank puts into the hole at the centre within tubes. Frank believes the death 'chosen' by the wasp predicts something about the future. There are also Sacrifice Poles, upon which hang the bodies and heads of larger animals, such as seagulls, that Frank has killed and other sacred items. They define and 'protect' the borders of Frank's territory - the island upon which he lives with his father.

Frank occupies himself with his rituals and maintaining an array of weapons (from his catapult, to pipe bombs and a crude flame thrower) to control the island. Frank is haunted by an accident which resulted in the loss of his genitalia and resents others for his impotence, particularly women. He goes for long walks and runs patrolling the island and occasionally gets drunk with his dwarf friend Jamie in the local pub. Other than that, Frank has almost no contact with the outside world and admits that he is afraid of it due to what it did to his brother, Eric.

Frank's older brother Eric is in an insane asylum after being arrested for brutalising the town's dogs. He escapes and frequently rings Frank from phone boxes to inform him of his progress back to the island. Their conversations invariably end badly, with Eric exploding in fits of rage. Frank is confused as to whether or not he is looking forward to seeing Eric, but it is clear Frank loves his brother dearly.

Frank remembers his older brother as being extremely sensitive before 'the incident' that drove him mad: a tragic case of neglect in a hospital where Eric was a volunteer. While attempting to feed a smiling brain-damaged child with acalvaria, Eric realises that the patient is unresponsive and only smiling off into space. He checks the usually-alert patient's head dressings to find the child's exposed brain tissue infested with day-old maggots.

Eric's imminent return precipitates a series of events that result in Frank discovering male hormone drugs in his father's study. After confronting his father, Frank finds out that he is a girl and that when he thought he was castrated by a dog mauling at an early age, Frank's father had simply pumped her full of male hormones to see if she would transition from female to male. The father said it was simply 'an experiment' and there are hints it was in order to distance himself from the women he felt had ruined his life.