I never thought a children's book could make me reconsider the schmaltziest day of the year but, while waiting in New York's west village to meet RJ Palacio on Valentine's Day morning, the hearts in my latte foam and the guys on street corners hawking cellophane-wrapped roses suddenly all seem rather touching. Wonder – a children's book that's making grown men cry, and being compared to Mark Haddon's The Curious Incident of the Dog in the Night-Time – recounts a year in the life of August, a 10-year-old boy with severe facial abnormalities, as he navigates school for the first time. "I won't describe what I look like," he cautions on the first page. "Whatever you're thinking, it's probably worse." His characterful, rueful voice begins the story before it's picked up by his peers – all of whom are just as uncannily charming.

Palacio, otherwise known as Raquel Jaramillo, has worked in publishing for years and has a cabinet full of her own unfinished stories. Writing Wonder, though, was a completely different experience to these "half-starts". The idea came to her five years ago when she and her two sons were outside an ice-cream parlour. A little girl with a condition similar to August's sat on the bench next to them and Palacio's youngest, who was then three, began to scream.

"It was just such a scene, the last thing I wanted," she says, and her large brown eyes look pained. "And as we were leaving I heard the mum behind me say in the coolest, sweetest, kindest voice, "OK guys, time to go", and my heart just broke for her. As a mother I was just in awe of this woman. And I could not stop thinking about that encounter – what I could have done differently, what I could be teaching my kids about how to deal with something like that? Is 'don't stare' the right thing to say? I'm not even sure…"

On Palacio's drive home, Natalie Merchant's "Wonder" came on the radio, a song that she used to play as a lullaby to her eldest son. "And somehow the connection between that song – the joyousness of it, 'with love, with patience and with faith she'll make her way' – and what had just happened really clicked. I got home that night and started writing. It basically wouldn't let me not finish it," she smiles. "It was just one of those things."

She tells me that she's just read Wonder to her youngest, who's now eight, and admits that the experience made her "choke up". August, or Auggie, is "a little bit my son, a little bit his friends, a little bit the son of a friend of mine who has that way of talking": she has them all to thank for the credibility of the dialogue. "I come home from work and there are gaggles of boys and they're so loud – it was perfect fodder for me because I could just transcribe what they were saying!"

Although Palacio wanted it to be "a kids' book first and foremost", she's delighted by the reaction it's getting from adults. "I keep hearing about all these people," she laughs, "like grown men who are weeping!"

She has described the book as a "meditation on kindness", but one thing that makes it so powerful is how subtle the cruelty is too. From the mother of a classmate who Photoshops Auggie's face out of the school picture, to a school-wide "game" called "the plague", which dictates that you have 30 seconds to wash your hands after touching him, it all feels authentically observed. Happily though, the acts of kindness and bravery, particularly those of Auggie's stalwart friends Jack and Summer, are just as unexpected and unsentimental.

Do her own kids and the kids of her friends confound her in that way? "Great question!" she enthuses, like a kindly teacher. "Yes. Yes! I always think if you give a kid a chance, nine out of 10 times they will surprise you and do the right thing. I really do. Kids are sweeter and kinder than we've given them credit for. We've almost come to expect kids to be mean to one another, and if we expect them to behave a certain way they'll act a certain way. But they're decent human beings, most of them."

But after a year of teen suicides and cyber-bullying headlines, it's easy to see childhood now as somehow more fraught than before. Does she think kids might be growing up in less kind times?

"I hope not, and I don't think so. God, I grew up in the 70s! New York in the 70s was not a kind place. But I've just always believed that there are more good people in the world than not, and that we're all there to kind of find one another and fend off the people that aren't so great. That's all you can do."

Wonder is published by Bodley Head on 1 March