When the two half-brothers, Wirt and Greg, find themselves lost in the mysterious forest of the Unknown, they meet an old Woodsman who warns them to watch out for the Beast, while a wolf chases after them.
After the two brothers help a bluebird named Beatrice out of a bush, the trio run into trouble when they unwittingly disrupt a harvest festival in a strange town, after which Beatrice takes them to Adelaide of the Pasture, who could help them get home.
When the trio come across a schoolhouse of animals, the teacher makes Wirt and Beatrice join the class, while a gorilla chases after Greg.
As Wirt and Greg try to find Adelaide's house, they end up in a tavern where they are warned that the Beast turns people into trees of oil to keep his lantern burning. The two brothers take Beatrice away on a horse after they find her unconscious.
In order to get money to take a ferry that will cross the river, the two brothers pretend to be the nephews of the eccentric millionaire Quincy Endicott, as they persuade him to look for a ghost. Beatrice reveals that Adelaide is the only one who can break the curse that befell her and her family.
As the trio get on a ferry, they run into a group of frogs and they dress up as a member of the ferry's band. When the two brothers finally meet Adelaide, a confrontation ensues between her and Beatrice.
After the two brothers run away from Beatrice, they come across a young girl named Lorna who is forced to work for the evil witch Auntie Whispers. Greg and Wirt attempt to help Lorna escape from the witch.
After the two brothers sail down a lake, they rest under a tree and Greg has a dream where he's in an angelic cloud city and he manages to save it from the North Wind. As the Queen of the Clouds grants one wish to Greg, he chooses to sacrifice himself to save Wirt from the Beast.
In a flashback, the events leading to the two brothers being lost in the Unknown are explained, as Wirt had a crush on Sara and followed her to a party at the graveyard.
As the final chapter of the adventure unfolds, the Woodsman tries to save Greg from the clutches of the Beast, while Wirt helps Beatrice lift the curse off herself and her family.