A lonely widow, longing for a child of her own, is given a barley seed by a good witch. The planted seed grows into a flower, and a tiny girl emerges from inside the blossom, no bigger than the old woman’s thumb. The old woman names the tiny girl Thumbelina and raises her as her own. Although Thumbelina loves her mother, she craves companionship from someone her own size. One night, the fairy prince Cornelius stumbles upon Thumbelina after hearing her beautiful singing. The two take a ride on Cornelius’ bumblebee and fall in love. During this ride, Mrs. Toad and her son Grundel are enchanted by Thumbelina’s singing. Cornelius promises to return the next day, but that night, Mrs. Toad kidnaps Thumbelina from her bed and takes her away to her show boat, where she desires Thumbelina to join their troupe and marry Grundel, who is in love with her. After the toads leave Thumbelina alone on a lily pad to fetch a priest, she is rescued by Jacquimo, a swallow who is infatuated with complicated love stories and encourages Thumbelina to return home. Meanwhile, Cornelius learns of Thumbelina’s kidnapping and returns to his kingdom, the Vale of the Fairies, to desperately ask his parents to try holding back the winter as long as they can.
Back at the pond, Grundel is told by his two younger brothers Mozo and Gringo that Thumbelina had escaped to find Cornelius, and he ventures out to find her. While trying to get home, Thumbelina is ambushed by Berkeley Beetle, who becomes enamored with her singing and promises to show her the way home if she sings at his Beetle Ball first. She reluctantly complies, but her bug disguise falls off during the concert and she is denounced as ugly, and Beetle rejects her without helping her. Following Thumbelina’s exit from the Ball, she is found by Jacquimo, who promises to find Cornelius for her. Beetle is confronted by Grundel and informs him that he let Thumbelina go. When Beetle is told that Thumbelina loves Cornelius, he suggests that Grundel should kidnap Cornelius and use him as bait to lure Thumbelina to him. Grundel coerces Beetle into partnership by removing his wings to ensure his cooperation.
Upon the arrival of winter, Cornelius falls into a pond during his search for Thumbelina and is frozen, while Jacquimo injures his wing and loses consciousness from the extreme cold. With both Cornelius and Jacquimo incapacitated, Thumbelina is forced to take refuge in an old shoe, where she is discovered by Miss Fieldmouse and granted shelter in her underground lair. After relaying Cornelius’ fate to Thumbelina, Miss Fieldmouse introduces her to her neighbor Mr. Mole, who is immediately infatuated with Thumbelina and desires to marry her. While touring Mr. Mole’s tunnel, they come across Jacquimo’s body, but Thumbelina discovers he is still alive. Devastated by the apparent loss of Cornelius, Thumbelina gives in to hopelessness and accepts Mr. Mole’s proposal after some persuasion from Miss Fieldmouse. Thumbelina later visits Jacquimo and he revives. Refusing to believe Cornelius is dead, Jacquimo leaves to find him before the wedding.
Beetle and Grundel find and abscond with Cornelius’ frozen body and subsequently learn of Thumbelina’s wedding. When they leave Cornelius behind and embark to Mr. Mole’s home, a trio of friendly insects find and thaw Cornelius. At the wedding, Thumbelina finds herself unable to marry Mr. Mole after remembering Cornelius’ promise to always love her. Grundel and Beetle suddenly appear, and a chase ensues. Cornelius also appears and engages Grundel in a fight which culminates in the two falling into a chasm. Thumbelina escapes her pursuers and meets with Jacquimo, who has found the Vale of the Fairies and takes her there. Thumbelina and Cornelius reunite, and Thumbelina magically grows her own pair of wings upon accepting Cornelius’ proposal. With Thumbelina‘s mother and the fairy court in attendance, the two marry and depart on Cornelius’ bumblebee.
Mid-credits images reveal that Beetle’s wings regrew and he resumed his pop career; Grundel survived the fall with a broken leg and married a female toad; and Mr. Mole married Miss Fieldmouse.