Santa Claus narrates the story of Buddy: a human whose mother gave him up for adoption before she died following his birth, and who crawled into Santa's toy sack that Christmas Eve. He was unknowingly taken to the North Pole and raised into adulthood by Santa as one of his
Christmas elves, unaware of his actual origins despite his height difference and lack of toy-making skills. Overhearing the truth about his species, Buddy confronts Santa, who encourages him to travel to
New York City, where his birth father Walter Hobbs now works as an executive for a children's book publishing firm. Buddy also learns that Walter is on Santa's naughty list due to his lacking belief in Santa. Buddy arrives at the publishing office in the
Empire State Building and musically greets Walter, who mistakes him for a singing telegram entertainer and calls for security to escort him to the nearby
Macy's Department Store. Buddy gets a job as one of the "elves" for the North Pole Village and becomes smitten with cynical coworker Jovie, successfully inviting her on a date. The next day, he exposes a mall Santa as an impostor leading to a scuffle that ends with the police taking him to the Hobbs family's apartment. He helps Walter's wife Emily and son Michael complete a school science project and is allowed to stay for the night. The following morning, several DNA tests confirm that Buddy is Walter's son. Walter reluctantly takes Buddy to his office at Emily's insistence, where his supervisor Mr. Greenway threatens to fire him if he does not publish a successful new book by Christmas Eve. That evening, Buddy takes Jovie to a romantic dinner at
Tavern on the Green and helps bring out her Christmas spirit by having her sing "A Christmas Song". Excited to share this news with Walter, Buddy makes it "snow" in the office by shredding a manuscript Walter was working on. Enraged, Walter expels Buddy from the office. A despondent and hungry Buddy encounters some out-of-work Santa actors at a Chinese restaurant and delays in arriving for his next date with Jovie, to whom he gives a snow globe Santa gave him. She is disappointed and departs. Emily and Michael read Buddy's goodbye letter and set out to retrieve him, but not before noticing Santa's sleigh outside their window. The pair and Buddy arrive at the Empire State Building where Walter is frantically trying to craft a pitch for Mr. Greenway. Buddy suggests a story based on his adventure. Mr. Greenway thinks it should be about a horse and orders Walter to work through Christmas on the idea. When Mr. Greenway rudely criticizes Walter's sons, Walter quits his job. Michael informs Buddy about Santa's sleigh and the Hobbs family races to
Central Park. Buddy realizes the sleigh needs Christmas spirit to be able to fly again. At Central Park, Buddy takes a microphone from a news crew covering what appears to be a UFO event and encourages everyone watching the news to spread Christmas spirit to repower Santa's sleigh. Jovie arrives and begins singing "A Christmas Song", inspiring everyone watching to sing along and thus restoring the sleigh's flight. Santa invites Buddy to come home to the North Pole, but he chooses to stay in New York, having found a new purpose in making the residents happy. Some time later, Buddy and Jovie settle down and have a son named Baby Buddy. Mr. Greenway is never seen or heard from again. The whole Hobbs family visits Santa's North Pole residence on Christmas Day per their new annual tradition. ==Cast==