The story Bastian reads is set in the magical land of Fantastica, a place of wonder ruled by the benevolent and mysterious Childlike Empress.

At the advice of the giant turtle Morla the Aged One, Atreyu sets off in search of an invisible oracle known as Uyulala, who may know the Empress's cure.

Realizing that the story will repeat itself forever without his intervention, Bastian names the Empress "Moon Child", and appears with her in Fantastica, where he restores its existence through his own imagination.

After being abetted by the wicked sorceress Xayide, and with the mysterious absence of the Childlike Empress, Bastian decides to take over Fantastica as emperor.

During his coronation ceremony he is stopped by Atreyu, whom Bastian grievously wounds in a battle so fierce it results in the destruction of the Ivory Tower.

Bastian then enters "The City of Old Emperors", inhabited by human beings who came to Fantastica earlier but could not find their way out, eking out a meaningless existence there.

This anthology of Michael Ende's unpublished works includes insight on the creation of The Neverending Story and has been translated into Japanese but not English.

[7] A survey conducted by German filmmaker Ulli Pfau found that The Neverending Story appeals particularly to readers aged 18–35.

[8][9] A less positive review in gaming magazine White Dwarf took issue with the appearance of the physical book, writing that "despite plush production the artwork is grotty, while the promised 'shimmering copper-coloured silk' binding looks like plain red cloth to me.

In The Rhetoric of Character in Children's Literature, literary critic Maria Nikolajeva states that "the two parts of the novel repeat each other" in that Bastian becomes a hero but then in the second half he "acts not even as an antihero but as a false hero of the fairy tale" and the characters of Bastian and Atreyu can also be seen as mirror halves.

[11] Helmut Gronemann's Fantastica—the Realm of the Unconscious explores the novel from a Jungian point of view, identifying archetypes and symbols in the story.

It was released in 1984, directed by Wolfgang Petersen and starring Barret Oliver as Bastian, Noah Hathaway as Atreyu, and Tami Stronach as the Childlike Empress.

[15] The NeverEnding Story II: The Next Chapter, directed by George T. Miller and starring Jonathan Brandis and Kenny Morrison, was released in 1990.

[16] The NeverEnding Story III, directed by Peter MacDonald and starring Jason James Richter, Melody Kay and Jack Black, was released in 1994 in Germany.

[18] From 2003 to 2004, the German publishing house AVAinternational published six novels of different authors in a series called Legends of Fantastica, each using parts of the original plot and characters to compose an entirely new storyline: The world première of the stage production took place in 2012 in Brisbane, Australia, by the Harvest Rain Theatre Company.

Tales from the Neverending Story, a one-season-only TV series that is loosely based on Ende's novel, was produced in Montreal, Quebec, Canada, through December 2000 to August 2002 and distributed by Muse Entertainment, airing on HBO in 2002.

[23] Ocean Software released a text adventure in 1985 for the ZX Spectrum, Amstrad CPC, Commodore 64, and Atari 8-bit computers.

[24] A video game based on the second film was released in 1990 by Merimpex Ltd under their Linel label and re-released by System 4 for the ZX Spectrum and Commodore 64.