House of Illusions shares the heroine of Lady of the Reeds, Thu, a peasant girl from the village of Aswat. Because she possesses both beauty and wisdom, Thu is chosen and trained at court. She rises in favor only to be betrayed in a court intrigue that threatens her life.

House of Illusions opens on Gedge's vividly recreated Egypt, sixteen years after Thu's banishment. Egyptian soldiers returning from missions down the Nile would occasionally pause in the village of Aswat to pray to the god of war, Wepwawet. The stories of the mad woman and her desperate pleas to have her manuscript delivered to Pharaoh are well known to them all.

Kamen, a junior officer from Pharaoh's palace guard, is forced to stay a night in the dreaded village of Aswat. Taking pity on Thu, he agrees to deliver her beautifully bound manuscript to Pharaoh. He errs, however, in failing to follow her exact instructions, thus setting in motion a fateful chain of events that ends in a threat to the lives of many, including his own.