Moving back into the family Manor in San Francisco, the youngest sister, Phoebe, discovered an old book — the Book of Shadows — in the attic. Reading an incantation from it, she unwittingly set in motion events that fulfilled an ancient prophecy. Strange and harrowing occurrences began which eventually led the sisters to realize that they are witches.

They discovered that not only do they possess supernatural powers, they came from a long line of powerful witches. The first in the line, Melinda Warren, was burned at the stake in the Salem Witch Trials. However, before she died, Melinda prophesied that each coming generation of Warren (later Halliwell) witches would grow stronger and stronger, culminating in the arrival of three sisters -- the strongest good witches the world had ever seen; the three sisters would form The Power of Three, the most powerful magical force ever.

Prue Halliwell, the oldest sister, developed the power of telekinesis where she could move things with her mind, later gaining the power of astral projection, where she could essentially make a clone of herself appear wherever she desired. Piper, the middle child, was initially given the power to freeze molecules, later developing the power to blow things up: molecular combustion. Phoebe, the youngest sister, had the original power of premonition, at first being able to see future events and later past events as well, and often is used to reveal the truth. She later obtained the power to levitate which let her defy gravity for several seconds which was useful with her martial arts skills. Her empathic powers developed in later years where she could read the feelings and emotions of others. Phoebe could also affect the supernatural powers of other beings whose powers were tied to their emotions.

After the tragic death of Prue, it was revealed that the sisters had a younger half-sister named Paige, born to their mother Patty and Sam, her Whitelighter, a guardian angel for witches. As such a relationship was forbidden and unheard of at the time, the baby was given to a nun and later adopted by the Matthews family. Her birth parents requested only that her first name begin with 'P', to continue the tradition. From her whitelighter father, Paige inherited the power to "orb". This also had an effect on the powers she inherited from Patty: instead of telekinesis, Paige is able to call for an object; the object in question will then either orb to her or to a location she directs with her thoughts or gestures. Though this power requires the use of verbal commands, she has been able to do so silently when in a state of enhanced power, and in a few other instances. This power is called telekinetic orbing. Halfway through Season 8, Paige developed more of her whitelighter side by being able to heal and locate charges by sensing them.

A central theme throughout the show's run is the sisters' struggle to balance normal lives with their supernatural responsibilities. The burden of keeping their destinies a secret from the outside world has repeatedly created tensions in their friendships, workplaces, and romantic relationships. Only a few knew their secret and helped them on a regular basis. The most important is Leo Wyatt, a Whitelighter assigned by the Elders to guide and protect the sisters. Leo means a great deal to the sisters both professionally and personally: he heals their wounds, advises them collectively and individually, and mediates between them and the enigmatic Elders. He also becomes the love of Piper's life, her husband and father of her children. Others who have kept the Charmed Ones' secret over the years include policemen Andy Trudeau and Darryl Morris, tormented half-demon Cole Turner, the mysterious time-traveler Chris Perry, the sisters Christy and Billie Jenkins, and Paige's husband, Henry Mitchell.