The plot summary in this article is too long or detailed compared to the rest of the content. Please edit the article to focus on discussing the work rather than merely reiterating the plot. (December 2008)
At the start of the film, a brief newsreel (narrated by Paul Frees) is shown, depicting kids worldwide awaiting Santa Claus. Then, Special Delivery "S.D." Kluger (Astaire) is introduced. His mail truck breaks down, so he begins to tell the story of Santa Claus, in order to answer children's letters to Santa.
The story begins in a gloomy small town called Sombertown, which is ruled by the mean and grouchy Burgermeister Meisterburger (voice: Paul Frees) (usually referred to simply as "The Burgermeister"). A baby arrives on his doorstep, with nothing more than a name tag that reads: "Claus" and a note asking for the Bugermeister to take care of the child. The Burgermeister orders his right-hand man, Grimsley (also voiced by Frees) to take the baby to the "Orphan Asylum" as he does not want it. On the way to the building, however, a gust of wind blows both sled and baby far away, to the mountains of the Whispering Winds. There, the animals living in that region hid him from the Winter Warlock (voice: Keenan Wynn), a powerful and malevolent wizard who dislikes anyone trespassing on his land. The animals bring the baby to the other side of the mountain, where he is discovered by an elf family by the name of Kringle, led by their wise matriarch, Tante Kringle. They immediately adopt him, giving him the name “Kris”. A few short years later, the boy Kris expresses to Tante the hope that he can one day restore the Kringle family to its former prominence as "The First Toymakers to the King;" however, as Tante explains, since the Burgermeister's rise to power and the fact that the Kringles can't pass through the mountains without inciting the wrath of the Winter Warlock, they have been unable to do so.
When Kris is old enough, he volunteers to deliver the toys to Sombertown, through the woods. Meanwhile, unbeknownst to Kris, the Burgermeister has outlawed all toys in the neighborhood, having comically tripped on and being injured by one when he was walking out of City Hall. In revenge, he declares that anyone found possessing a toy will be arrested and thrown in the dungeon. Meanwhile, before Kris makes it into the town, he befriends a penguin who has lost his way while trying to make it to the South Pole and gives the little penguin the name "Topper". However, he has a close encounter with the Warlock, warning to leave, otherwise he is doomed. As Kringle and Topper run away, the Warlock suspects that he might come back and if he does, it will be his last trip. Once Kris enters the town, he meets Miss Jessica (voice: Robie Lester), a local schoolteacher. At first, Jess is a bit rude to Kris, but suddenly finds herself liking him when he offers her the one thing she'd always wanted for Christmas: a China doll. But not everyone is amused to see Kris, nor are they overly fond of the way he is dressed. Why, they're even frightened off by his very mentioning the word "toy". Indeed, the children of the town have been forced into hard labor, mostly by washing their stockings. Kris, however, decides to do something about that and begins handing out toys to the wee ones. Just then, the Burgermeister arrives on the scene. At first, he almost arrests the children when he discovers them playing with the toys that Kris gave them, even almost turning good when Kris gives him a yo-yo which he loves. Ever loyal, Grimsley quickly reminds the Burgermeister, however, that he is breaking his own law, so he soon snaps out of it, and after a short confrontation, chases him out of town.
In the woods outside of town, Kris and Topper meet the Winter Warlock, who has vowed to capture the interlopers. Before the Warlock can finish Kris off, the latter offers the former a toy train. This act of kindness melts the Warlock’s icy heart, and the Warlock ("Winter, please!"), soon finds himself rediscovering the wonder of changing from bad to good, as he and Kris perform "One Foot in Front of the Other." Winter next shows Kris how to see who is naughty and nice through the power of a Magic Crystal Snowball. They soon see Jessica, who has been looking for Kris to say that the kids have been requesting more toys since the Burgermeister destroyed them all. Well, much to the Burgermeister's chagrin, Kris quickly grants that wish. With so many toys needed delivery, the Kringles moved up to the mountains, happily welcomed by Winter. The Burgermeister makes several more attempts to stop young Kringle (ordering the town's doors and windows locked, for example, forcing Kris down the village's chimneys). Next, the Burgermeister and his men start to search every home at dawn, finding no toys (as they were hidden in the stockings). Eventually, the Meisterburgers set a trap for Kris and the others; then, with the children of Sombertown forced to watch, every last toy in the village is burned! A few days later, Jessica, as the only one who managed to evade capture, personally confronts the Burgermeister - only to be rudely rebuffed by him. Feeling betrayed by the town, Jessica later sneaks back to Winter's dungeon cell, where Winter shows her some of his "magic feed corn", (his last available bit of magic) which will give reindeer the ability to fly. With the help of the reindeer, Kris, Topper, Winter (who has a renewed faith in his magic) and the Kringles escape from their holding cells, and flee into the woods.
After months of being an outlaw (we see how his being named Public Enemy #1 leads him to be highlighted on a poster reading: "Wanted, dead or alive - the Terrible Toymaker!"), Kris returns to the woods, where he begins to grow his trademark beard as a disguise. But Tante, realizing the Kringle name is now dangerous, suggests that he return to his birth name of "Claus." Taking the matriarch's advice, he then asks Jessica to share the Claus name with him - as his wife. (In a last gesture, Winter manages to produce "just a little magic" to light the trees) After witnessing Kris and Jess solemnly take their vows, the group migrates to the North Pole, where they eventually build Santa's Castle and Workshop. As time continues to pass, though, the Burgermeister regime ends, as their forebears begin dying off and falling out of power, at which point the Sombertowners realize how silly the Meisterburger laws really are. Kris' legend, meanwhile, goes worldwide, and, having now fully styled himself as Santa Claus, our hero soon accepts his apparent inability to keep up with all those toy requests .... leading him to make his fateful decision to cut his number of visits down to once a year, on December 24.
The film ends as S.D. Kluger reflects on what Santa's real meaning is all about. Just then, though, S.D. remembers that he still has a load of letters to deliver to Santa. Then, joined by Topper, Winter and a parade of children, S.D. begins to sing Santa Claus Is Coming to Town. The film's closing scene has Kris and Jess in silhouette, as he puts his old hat back on his head. Then, Santa steps out of his Palace, revealing himself in full splendor.
