Act I:
In the nursery of the Darling family home in London, young Wendy reads to her brothers, John and Michael. After their parents leave for the evening and the coast is clear, Tinkerbelle, a sprightly fairy, enters the nursery looking for Peter Pan. Peter chases his Shadow into the nursery, and the commotion awakens Wendy and her brothers.
Peter introduces the children to Tinkerbelle, and the two teach the children how to fly so they can accompany them back to Neverland, the land where children never grow up.
In the forest of Neverland, we meet the Neverlanders, the native people of Neverland, led by the fearless Tiger Lilly. The Lost Boys, a group of children brought to Neverland by Peter after falling out of their prams, are tracking the Neverlanders.
Tinkerbelle arrives back and instructs the Lost Boys to slingshot the “Wendy-Bird” when she appears. When Peter lands back in Neverland, he is furious that Wendy has been hit, and he scolds the Lost Boys and Tinkerbelle. However, after Wendy reveals that she is only pretending to be asleep, everyone celebrates before returning to their underground lair.
Alone in the forest, Tiger Lilly is ambushed by Captain Hook and his pirates and taken prisoner to be used as bait to lure Peter — but, always closely behind is the crocodile who, after a taste of Hook’s left hand, is in search of another morsel.
Act II:
In the mermaid’s lagoon, the Mermaid Queen is joined by Peter, Wendy, John, and Michael. The mermaids flee when Hook and the Pirates arrive with Tiger Lilly in tow. While the Pirates are distracted, Peter quietly unties Tiger Lilly and leads her back to the forest. The Lost Boys and Neverlanders, usually at odds with each other, come together to celebrate Peter freeing Tiger Lilly.
Peter, the Darlings, and the Lost Boys return to their underground lair, where Wendy tells the children they can come home with her and her brothers. Only Peter refuses, much to Wendy’s dismay. However, as the children leave the lair, they are captured by Hook and his pirates. Sensing something is amiss, Peter rushes to rescue them.
On Hook’s ship, Hook tries to convince Wendy to join him as a pirate, but Peter interrupts and challenges him to a duel. After a fierce battle, Hook loses his footing and is thrown overboard into the waiting jaws of the crocodile.
The Lost Boys return to London with Wendy and her brothers, but Peter again refuses to leave. Wendy is devastated but knows she must return home.
Wendy and her brothers appear back at the nursery window and quietly sneak back into their beds. Upon awakening, Mrs. Darling is overjoyed that her children have returned but startled to see the Lost Boys coming in through the window. Wendy and her brothers explain their harrowing adventure, and Mrs. Darling agrees to adopt the Lost Boys into their family.
Peter and Tinkerbelle look on through the window as Wendy reads a bedtime story to the children.