After Mytyl and her brother Tyltyl trap a rare bird in the royal forest, Mytyl selfishly refuses to give the bird to her sick friend, Angela Berlingot. That night, Mytyl is complaining to her parents when word comes that war has been declared and her father has been summoned to protect the frontiers. The children then go to bed, where Mytyl dreams of the Fairy Berylume, who sends her and Tyltyl off to find the blue bird of happiness. Tylette, the treacherous family cat, and Tylo, the loyal family dog, go along to keep them company and Light shines in to to show them the way. They begin their search in the past, where the children come to the graveyard in which their Grandpa and Grandma slumber. Their grandparents awake to greet them, but no blue birds are to be found in the past, and so, prompted by Tylette, the children continue their search in the land of Mrs. and Mr. Luxury. Soon discovering that happiness lies not in riches, the children begin to long for their parents, and with the help of Tylo, escape from the land of Luxury. Tylette then ventures into the forest where, hoping to thwart the children's quest, she admonishes the trees to terrify them into returning home. The trees conspire with wind and fire to kill the children, and in the ensuing storm, Tylette perishes while the children escape to visit the Kingdom of the Future to search for the blue bird. In the future, they meet the unborn children of the world waiting for Father Time to take them to Earth in his ship of silver sails. Finally returning home, Mytyl awakens to learn that a truce has been declared and finds the blue bird in her very own home. Filled with joy, Mytyl presents the bird to Angela, who experiences a miraculous recovery. As Angela fondles the bird, it flies away to freedom, but Mytyl assures her they will always be able to find it again.