The Magician's Nephew

Published in 1955, the prequel The Magician's Nephew' brings the reader back to the very beginning of Narnia where we learn how Aslan created the world and how evil first entered it. Many mysteries of Narnia are revealed as another group of children stumble into Narnia via an entirely different route.

Arc Advancement
A crucial book in terms of Narnian history, of course, as all of Narnia is created in this book. The reader is also introduced to young Digory and the witch Jadis, both of which will prove to be important characters in other books.

Controversy
In the 1990s, book publishers started putting this one first in sequence, since it's the first story to happen chronologically. However, many fans disagree with this numbering, arguing that readers should start instead with The Lion, the Witch and the Wardrobe (the first published book), since many surprises are revealed in Magician's that would later pay off in Lion.