A windup toy Mouse and his Child are placed in a store window while a Tramp and his dog watch them dance. When the Clock in the store strikes midnight, all of the toys come alive. The Mouse and his Child explore their new home, wondering who they are, and the Elephant and the Tin Seal explain that they are all toys that will one day be purchased and will leave the store. Although the pair doesn’t want to part with their newfound family, the Clock insists they have no choice. Upset, the pair accidentally topples off of the table and break, prompting the storeowner to discard them in the trash. However, the Tramp finds them, repairs the damage, winds them up, and sends them on their way. The pair is almost run over by a truck, but they are saved by Manny the Rat, who takes the pair to his home, a dirty, underground city filled with other rats that are a band of thieves. Sometime later, the pair meets a fortune-teller Frog, whom Manny fires from the racket for not bringing in any money. Manny informs the pair that they are now his slaves who must collect garbage forever, then sends them to rob a bank with a supply of treacle brittle with Ralphie the Rat. The pair reunites with Frog, who asks them what they wish for their future. While the Child wants the Elephant to be his mother, the Tin Seal to be his sister, and to live in the toy store as a family, the Mouse wishes to be a self-winding toy, free from overseers. As the Frog predicts a long, hard road ahead, Ralphie and the pair continue to the bank where Ralphie is eaten by the Badger security guard. The pair escapes, but Frog catches up with them and offers to make their wishes come true. Frog has heard that the Tin Seal from the toy store might be able to help them, so they set off in search of her. When Manny gets word that Ralphie was killed, he robs the bank himself, then tracks down his escaped slaves to a frozen pond. As Manny confronts them, a battle between the Shrews and the Mice suddenly erupts and a Weasel attacks Manny, who dives under the ice and hides. As the pair and Frog run away, an Owl swoops down and grabs Frog, but he breaks free and falls into a tree. Meanwhile, an actress parrot named Euterpe rescues the Mouse and his Child, inviting them to join her theatrical troupe. When the pair asks if she knows the Tin Seal, she tells them that the Seal used to be a member of her troupe, but she ran off with the Old Muskrat. Later, the pair performs in a play, which Manny interrupts. The audience attacks Manny and the pair escapes. Euterpe drops them off on the doorstep of the Old Muskrat, who she says is the smartest person she knows. The Old Muskrat reports that the Tin Seal ran off with a travelling flea circus, but offers to make the pair self-winding if they help him chop down a giant tree. The Mouse and his Child agree, unaware that Frog has been living in it. As the pair spends countless hours chopping down the tree, Manny the Rat continues his search for them with Elephant from the toy store, whom he has captured for assistance. Meanwhile, a hawk swoops down and grabs the pair as the tree finally topples and lands in a pond, causing it to flood. Frog falls out of the tree and sees the hawk carrying his friends away, then enlists the help of a bird to follow them. However, the hawk realizes that the pair are not real mice and drops them in the pond. Underwater, the pair meets a moody philosopher turtle who refuses to help, but the Tin Seal and Frog recue them from their watery grave. Their happy reunion is cut short when Manny arrives with the Elephant. Manny grabs a rock and smashes the Mouse and his Child to bits. Horrified, Manny runs away as the pair’s friends gather their broken pieces and take them to the Old Muskrat, who puts them back together and grants their wish of becoming self-winding. The Mouse and his Child rejoice and the friends set off to save the Elephant from Manny. Meanwhile, Manny and his fellow rats throw a party at his new residence, the dollhouse from the toy store, which is now on top of a power pole along the train tracks. As the rats celebrate, the group of friends ties a rope from the house to a train signal, and then rescues the Elephant. As a train approaches, the signal raises the rope, thereby pulling the house down the power pole. The friends find Manny on the tracks, defeated, but show mercy and leave him alone. Months later, the Mouse and the Elephant get married. They have fixed up the dollhouse and live together as a family next to the train tracks. As the Tramp passes by the store window and peers inside, he tells everyone to “be happy.”