Bastian Bux is a young boy and a frequent daydreamer, much to the dismay of his father. One day, on the way to school, Bastian meets Alvin, Baby Bugs Bunny, Baby Kermit, Pooh and all their friends get chased by bullies, hide in a bookstore, and interrupt the owner, Mr. Koreander who was reading from a book called "The Neverending Story." Bastian takes interest in the book, but Mr. Koreander warns him it is "not safe;" nevertheless, when Mr. Koreander goes to take a telephone call, Bastian borrows the book and races towards school. Already tardy, Bastian heads to the school's attic and begins reading "The Neverending Story."
The book had Pooh, Alvin Seville, Baby Kermit, Bab Bugs and all their friends in the story and it describes the fantasy world of Fantasia (RJane thought it was a Disney movie, but got yelled by the narrator voiced by Youtube user Missoliverandblossom) which is being threatened by a force called "The Nothing" that consumes everything. The creatures of Fantasia have gathered to plead for help from the Empress of Fantasia, but she has fallen deathly ill due to the Nothing. She has summoned a young warrior from the Plains People, Atreyu, to help put an end to the Nothing, giving him a magical medallion called the to use as a guide and a symbol of the Empress. As Atreyu sets off on his quest with Pooh and the gang in tow, the Nothing summons G'mork, a wolf-like creature (even though it's hard for the narrator to pronounce his name), to stop and kill Atreyu with Jafar, Iago and Maleficent as his ades. Atreyu heads to the Swamps of Sadness to see the ancient Morla who he believes can help him; while Atreyu is protected by the Auryn, the Swamps take his horse, Artax, (minus off the help of the narrator since he's stuck in the booth) forcing Athe team to continue on foot. When the book describes Morla, an embittered giant turtle, Bastian screams to himself at the horrific description, and continues reading to find that Atreyu, the others and Morla heard a scream. Morla cannot help Atreyu and the others, but directs him to the Southern Oracle. Atreyu travels there with the help of a luckdragon, Falkor. Two old named Engywook and Urgl tend to Atreyu's injuries, then the gnomes give Atreyu advice for how to pass the that guard the Oracle. Atreyu is able to pass the Sphinxes' gaze and reaches the Magic Mirror Gate. As Atreyu and the others approach it, the image of the Gate is shown to reveal a child that matches Bastian's description perfectly. Bastian throws the book away in disbelief, but cautiously begins reading it again, wondering if the people of Fantasia really know him; as it has grown late, Bastian has arranged several candles to provide light. As Bastian continues reading, Atreyu passes through the Gate and meets Uyulala the Oracle. She tells them that the only way to stop the Nothing is to save the Empress, and for that to occur, she needs to be given a new name by a human child outside the boundaries of Fantasia. As the Nothing approaches and starts to consume the Oracle, Atreyu races back to the gnomes and Falkor. Falkor offers his help to Atreyu, and they set off. The two are nearly consumed by the Nothing, causing Atreyu, Alvin, Baby Bugs, Baby Kermit, Pooh and all the others to fall off Falkor's back and into the sea, where he loses the Auryn. When Atreyu awakes, they find themselfs on a beach near an abandoned town close to the approaching Nothing and discovers a series of murals in a stone garden that depicts Atreyu's journey so far. They encounter Gmork, Jafar, Iago and Maleficent, though the wolf being does not recognize Atreyu without the Auryn. Gmork explains that Fantasia has no boundaries because it is humanities' hopes and dreams, but that the Nothing, representing and despair, eats away at it. Gmork further reveals that he was chasing Fantasia's only hope, a boy named Atreyu, but lost him in the Swamps of Sadness. When Atreyu reveals himself to Gmork, the wolf being attacks him, but Atreyu manages to defeat Gmork by using a stone slab. Weak from the injuries and with the Nothing beginning to consume the area, Atreyu nearly gives up hope. Falkor arrives, having found the Auryn, and rescues Atreyu. Atreyu wakes on Falkor's back to find only pockets of Fantasia remain floating in a void. With the Auryn's guidance, they manage to find the Empress' home, the Ivory Tower, which still stands. They fly towards it, and Atreyu sadly reports his loss to the Empress having failed to find a human child, but the Empress reveals that he in fact succeed, and explains all the points where Bastian appeared in the story. As Bastian continues reading and realizes the book is talking specifically about him, he realizes that he has a name for the Empress but fears what the outcome might be. As the Nothing begins to consume the Ivory Tower, the Empress pleads for Bastian to say her new name; Bastian races to the attic window and shouts "Moon Child!;" a strong wind blows out the candles in the attic. Bastian finds himself face to face with the Empress, who reveals that the Nothing has consumed all but one grain of sand from Fantasia. However, she explains, Bastian's wishes and imagination can help to regrow the world. Bastian quickly wishes for the restoration of Fantasia, and then to ride on Falkor; during the flight, he finds all the characters to have been restored, include Atreyu riding happily on Artax. Bastian then whispers one more wish to Falkor. In the real world, the bullies that chased Bastian the previous day suddenly find themselves chased by Bastian and Falkor, and end up falling and hiding in piles of garbage. Bastian and Falkor soar triumphantly off into the sky, a narrator reveals that Bastian had many amazing adventures... but that's another story (at least the narrator thinks it is).
- Littlefoot, Baby Bugs Bunny, Baby Kermit, Winnie The Pooh, all thier characters are heroes, Rjane, Jafar, Iago, and Maleficent are guest stars in this movie.
- This movie shows Alvin's annoying liking to Mr. Belvedere.