The story begins with a series of letters between Nathanael, his fiancée Clara, and her brother Lothar. Nathanael describes a childhood fear of a creature called The Sandman who was said to come at night and steal the eyes of children, which intermingled with a the appearance of a man named Coppelius in his father's room some nights to work on what appears to have been alchemy. This man once attacked Nathanael, threatening to take his eyes, and later killed his father before disappearing.

Ernst Theodor Amadeus Hoffmann (commonly abbreviated as E. T. A. Hoffmann; born Ernst Theodor Wilhelm Hoffmann; 24 January 1776 – 25 June 1822) was a Prussian Romantic author of fantasy and Gothic horror, a jurist, composer, music critic, draftsman and caricaturist.[1][2][3] His stories form the basis of Jacques Offenbach's famous opera The Tales of Hoffmann, in which Hoffmann appears (heavily fictionalized) as the hero. He is also the author of the novella The Nutcracker and the Mouse King, on which Pyotr Ilyich Tchaikovsky's ballet The Nutcracker is based. The ballet Coppélia is based on two other stories that Hoffmann wrote, while Schumann's Kreisleriana is based on Hoffmann's character Johannes Kreisler.