Matilda is an extraordinarily intelligent girl, but is ignored by her stepparents Harry and Zinnia and bullied by her stepbrother Michael. When Matilda is left home, she spends the time going to the library reading books. One day, her father punishes her for being a "smart alec" and sends her to her room, prompting her to get revenge by dying her father's hair blonde, and then gluing his hat to his head after he reveals how he sells used cars to customers, which is illegal. Despite not knowing she did it, he takes his anger out on her, horribly tearing up her library book and forcing her to watch the TV. The TV then explodes, the first sign she has telekinesis powers, but her parents blame the TV.
Her parents finally enroll her to Crunchem Hall Elementary School. Matilda immediately becomes friends with a girl named Lavender, but is warned by an older girl named Hortensia that the children are menaced by the principal, Miss Agatha Trunchbull. Hortensia tells stories of how the Trunchbull threw a boy out the window for eating candy during class, and also that she has a tortue device she puts children in called "the Chokey." The Trunchbull's behavior is confirmed when she throws a girl named Amanda Thripp over the fence for having pigtails.
Matilda's teacher, Miss Jennifer Honey, is kind and is astounded by Matilda's intellect, and asks the Trunchbull to move her up several grades, but the Trunchbull, having been sold a car by Harry and been told horrble stories of Matilda, believes Jenny wants to get rid of her and she is dismissed. Jenny then tries talking to Matilda's parents, but they make it clear they don't care about their daughter at all.
The Trunchbull holds an assembly and accuses a boy, Bruce Boggtrotter, of eating her chocolate cake, which he did. The Trunchbull then makes him eat a whole cake. Bruce has difficulty but is urged on by the class. He finally does eat the whole cake, and an enraged Trunchbull forces the assembly to stay five hours after school to copy from the dictionary. When Matilda returns home, she notices two FBI agents watching the Wormwoods, trying to catch them selling used cars, but her family is convinced they are speedboat sailsmen.
At school, Matilda is put in the Chokey by the Trunchbull in response to finding out her father sold her a used car, but she is released by Jenny. Lavender puts a newt in the Trunchbull's water jug, but the Trunchbull blames Matilda, and Matilda uses her telekinesis powers to tip the glass over onto the Trunchbull, prompting her to leave, embarrassed. Matilda tells Jenny, but is unable to do it a second time. Jenny invites Matilda to the Trunchbull's house, where she reveals she is the Trunchbull's niece, who's father died unexpectedly. The Trunchbull arrives and Jenny and Matilda escape.
Matilda practices her telekinesis powers, and drives off the FBI agents. She leaves the house at night and goes to the Trunchbull's house, where she torments her with her telekinesis powers. As she leaves, she leaves behind her red ribbon, which the Trunchbull finds. Matilda gives Jenny her doll and a chocolate and demonstrates her powers before the Trunchbull arrives and accuses Matilda of entering her house, to which Jenny accidently reveals she is the Trunchbull's niece in front of the class. Matilda then uses her powers to lift a piece of chalk and write on the blackboard, pretending to be Magnus's ghost, causing the Trunchbull to faint. She wakes up and throws a boy out the window, but Matilda sends him flying back into the Trunchbull, knocking her down. She then tries to tackle Lavender, but Matilda lifts her into the air and the Trunchbull crashes into the hallway. The children then pelt her with their food, joined by every kid in the school, and drive her away, ending her menace.
Matilda is visiting Jenny when the Wormwoods arrive, being chased by the FBI, and are moving the Guam. Matilda wants to stay with Jenny, so the Wormwoods sign the adoption paper and drive away, leaving Matilda with Jenny. They then spend the time at home having fun, while Jenny becomes principal of Crunchem Hall Elementary School.
- Mara Wilson as Matilda Wormwood, the main protagonist and the precoucious daughter of Mrs. Honey.
- Danny DeVito as Mr. Harry Wormwood, Matilda's mean stepfather who loves lemon cars and the secondary antagonist of the film.
- Rhea Perlman as Mrs. Zinnia Wormwood, Matilda's snide stepmother and the teirtary antagonist.
- Embeth Davidtz as Jennifer Honey, the duerteragonist and Matilda's teacher and also her mother.
- Pam Ferris as Miss Agatha Trunchbull, the primary antagonist and the principal of Crunchem Hall Elementary School who abuses the children there. She is also Jenny's step-aunt.
- Paul Reubens and Tracey Walter as the FBI Agents, spies for the government who spy on the Wormwoods.
- Brian Levinson as Michael Wormwood, Matilda's older stepbrother who likes to torment on Matilda and the minor antagonist.
- Jean Speegle Howard as Mrs Phelps, the librarian at the library Matilda goes to.
- R.D. Robb as Roy.
- Goliath Gregory as Luther.
- Fred Parnes as Waiter.
- Kiami Davael as Lavender, the tritagonist and Matilda's best friend.
- Leor Livneh Hackel as Julius Rottwinkle, a boy who appears in a flashback from Hortensia who was thrown out the window by the Trunchbull for eating candy during class.
- Jacqueline Steiger as Amanda Thripp, a girl in Matilda's class. She had pigtails but cut them off after the Trunchbull, who hated pigtails, threw her over the fence.
- Jimmy Karz as Bruce Bogtrotter, a slightly overweight boy who is forced to eat an entire cake by the Trunchbull. At the film's climax, he shoves a cake into the Trunchbul's face as the kids drive her away.
- Michael Valentine as Nigel Hicks, a boy in Matilda's class.
- Liam Kearns as Charles.
- Mark Watson as Magnus, Jenny's father who died unexpectedly, hinted to have been murdered by the Trunchbull.
- Kira Spencer Hesser as Hortensia, one of the older kids.
- Marian Dugan as Cookie, the cook at Crunchem Hall Elementary School.