A good witch gives a seed to a lonely old widow. The seed is planted and grows into a flower, from which a tiny girl, no bigger than the widow's thumb, comes out. The girl is named Thumbelina and raised as the widow's daughter.
Thumbelina lives happily on the widow's farm, but soon gets lonely and longs for companionship from someone of her own size. One night, she meets Cornelius, the prince of the fairies, and they immediately strike up a romance. As they ride on Cornelius' pet bumblebee, a toad named Grundel becomes enchanted by Thumbelina's beauty and vows to marry her. Cornelius returns Thumbelina to her home and promises to return, but she is soon abducted by Mrs. Toad and taken to their show boat as a bride for Grundel. When the leave to find a priest, leaving Thumbelina stranded and alone on a lily pad, she meets a friendly swallow named Jacquimo, who helps her escape and, with the help of his friends, the jitterugs, vows to help her return home and to Cornelius. Jacquimo leaves to find the prince, who learns of Thumbelina's kidnapping from her mother's dog, Hero, and sets off to find her.
Thumbelina runs into Berkeley Beetle, who scares the jitterbugs away. Enamored by her singing and beauty, he promises to help her get back home in exchange for singing at his Beetle Ball that night, to which she reluctantly agrees. But when her bug disguise falls out during the concert, the public denounces her as ugly and Berkeley kicks her out, thus going back on his word. Jacquimo finds her and promises to find Cornelius. Along the way, he meets a rabbit and a fox chasing her, and fails to get them to listen for help. He is then caught in a storm and impales his wing on a thorn bush, getting knocked out by the cold in the process. Cornelius is also caught in the storm and falls into a lake, where he freezes solid. Thumbelina meets with Miss Fieldmouse, who provides her shelter and informs her of Cornelius' fate, leaving her devastated. She then meets Mr. Mole, who has found Jacquimo and brought him inside from the cold, though Thumbelina realizes that he is still alive. Mr. Mole, who has been planning to take a wife for some time now, desires to marry Thumbelina, who agrees to after some persuasion from Miss Fieldmouse. Jacquimo recovers from his injury and, refusing to believing that Cornelius is dead, sets off to find him once again.
Having also set off to find Thumbelina in hopes of bringing her back, Grundel runs into Berkeley and forces him to join the search by removing his wings in order to make him cooperate. Berkeley suggests finding and using Cornelius as bait for Thumbelina, luring her into a trap that will lead her to Grundel. Berkeley finds Cornelius' frozen body and brings him to Grundel, also informing him of Thumbelina's impending marriage to Mr. Mole. They set off to retrieve her as the jitterbugs arrive and begin to thaw Cornelius' body out. As the wedding begins, Thumbelina refuses Mr. Mole's proposal and confirms her love for Cornelius just as Grundel and Berkeley arrive, and a chase ensues. Cornelius arrives and battles Grundel, leading to both falling into an abyss. Thumbelina reunites with Jacquimo and is taken to Cornelius' kingdom, the Vale of the Fairies, where she sings to bring him out. Having survived the fall, Cornelius arrives and proposes to her; she accepts.
With Jacquimo, Thumbelina's mother and the entire fairy court in attendance, Thumbelina and Cornelius are married and fly off on his bumblebee. As the credits roll, pictures are shown revealing the fates of key characters: Berkeley has resumed his singing career and grown a new pair of wings; Miss Fieldmouse has married Mr. Mole; Grundel has survived the fall, though with some injuries, and married a female toad; and the rabbit and fox have settled their differences and formed a friendship.
- Jodi Benson as Thumbelina
- Gary Imhoff as Prince Cornelius
- Joe Lynch as Grundel Toad
- Gino Conforti as Jacquimo
- Gilbert Gottfried as Berkeley Beetle
- Carol Channing as Miss Fieldmouse
- John Hurt as Mr. Mole
- Barbara Cook as Thumbelina's mother
- Charo as Mrs. Toad
- Kenneth Mars as King Colbert, Cornelius' father
- June Foray as Queen Tabitha, Cornelius' mother
- Will Ryan as Hero, Reverend Rat, The Goat
- Danny Mann as Mozo, Grundel's younger brother
- Loren Lester as Gringo, Grundel's younger brother
- Pat Musick as Mrs. Rabbit
- Neil Ross as Mr. Bear, Mr. Fox
- Tony Jay as the Bull
- Tawny Sunshine Glover as Gnatty, one of the jitterbugs
- Michael Nunes as Li'l Bee, one of the jitterbugs
- Kendall Cunningham as Baby Bug, one of the jitterbugs