Their mother buys the children a new carpet to replace one from the nursery that they have destroyed in an accidental fire.

It deviates from the other two novels insofar as it includes only a brief mention of the Psammead, a magical creature introduced in the first volume, and depicts the five children as living with both of their parents in the family home in London.

In the other two volumes, circumstances have forced the children to spend protracted periods away from their home and their father.

The story begins shortly before 5 November, celebrated in Britain as Guy Fawkes Night, when people build bonfires and set off fireworks.

The four children have accumulated a small hoard of fireworks for the night, but they are too impatient to wait until 5 November to light them, so they set off a few samples in the nursery.

To replace it their parents purchase a second-hand carpet, which is found to contain an egg that emits a phosphorescent glow.

The children accidentally knock the egg into the fire, whereupon it hatches, revealing a golden talking Phoenix.

The children also have an encounter with two older ruffians, Herb and Ike, who attempt to steal the Phoenix.

Four of the children (without the Lamb) attend a Christmas pantomime at a theatre in the West End of London, smuggling the Phoenix along inside Robert's coat.

All ends well when the Phoenix magically reverses the damage: no one is harmed, and the theatre remains intact.

The Phoenix favours Robert, the child who put his egg in the fire, albeit by accident, over his brother Cyril and their sisters.

This is a mixed privilege, as Robert is lumbered with the duty of smuggling the Phoenix past their parents at inconvenient moments.

In the novel's final chapter, the Phoenix announces that he has reached the end of his current lifespan and must begin the cycle again, apparently on the grounds that life with the children has left him far more exhausted than he would have been in the wilderness.

The magic carpet has also reached the end of its lifespan, as it was never intended to be walked upon regularly, and, at the request of the Phoenix, it takes the egg to a place where it won't hatch again for 2,000 years.

The last volume in the trilogy, The Story of the Amulet, contains a minor episode in which the children travel thousands of years into the past and encounter the Phoenix, who does not recognise them because the events of the previous book have not happened yet.

Robert accidentally rolls the egg into the fire and out hatches the Phoenix, who tells the tale of the magic carpet.

Robert and Jane fall through a hole in the carpet, which continues on and takes Cyril and Anthea to their Uncle Reginald.

Jane and Robert fall into a house and meet the clergyman who married the cook and burglar, but they are rescued by the Phoenix getting help from the Psammead.

The carpet brings the children home safely and the Phoenix uses its powers to reverse the damage.

What remains of the carpet is given to the Psammead, who in return grants the Phoenix's last wish: to send the children all the toys they have ever wanted.

He is also the one child who thinks to bring candles on their adventures after experiencing the dark tower and cave on the first carpet trip.

This creature takes on the role of a Deus Ex Machina – it steps in throughout the story to rescue the children from the various situations they find themselves in.

References to other works: Nesbit alludes to many different works of literature that were familiar to and recognised by children in the early 20th century, including King Solomon's Mines, The Count of Monte Cristo, Rudyard Kipling's tales of India, The Arabian Nights and many others.

Referenced in other works: In Part Three of the book The Dark is Rising, by Susan Cooper, The Phoenix and the Carpet is mentioned being read aloud to children during a terrible snow storm while many of the local villagers, including the main character Will, take shelter in the Old Manor house.

The cook, a lower-class character, is voiced in an ungrammatical pidgin-english; for instance, she says "...there's that there new carpet in their room..." (Chapter 3).

The upper class, on the other hand, have money, status, education and leisure time to pursue such activities as theatregoing.

Racial issues: Nesbit's work has been criticised by some critics as being racist and having anti-Semitic characterisations.

In Chapter 3 of this novel the children encounter people described as having copper-toned skin, whom they immediately assume are savage cannibals.

The BBC produced three television series: one week of Jackanory in 1965, another written by John Tully that aired in 1976, and finally The Phoenix and the Carpet (1997), with a new screenplay by Helen Cresswell.