One of the painters becomes Gepetto, an old man. He is so cold, but he only has one piece of wood left to burn. One of the painters becomes that piece of wood. As Gepetto goes to split the piece of wood, the painter playing the wood says, ‘No!’ Gepetto thinks perhaps there is someone inside the piece of wood. He chisels the wood to create a little puppet. Gepetto names him Pinocchio.

Pinocchio comes to life and immediately starts misbehaving. He mocks Gepetto, and Gepetto gets angry. Pinocchio kicks Gepetto in the bum. Gepetto teaches Pinocchio how to walk. Gepetto says he’s walking like a real boy. Pinocchio says that he wants to be a real boy. Gepetto tells him that real boys have to go to school by themselves. Pinocchio doesn’t want to but really wants to be a real boy. Pinocchio steps away from Gepetto and instigates a chasing game.

During the game, Pinocchio runs out the door. Gepetto calls for the Policeman to follow him. Pinocchio throws a tantrum when he gets caught and says he doesn’t want to go home. The Policeman arrests Gepetto for not looking after Pinocchio and takes him away.

Pinocchio is left alone with Gepetto’s friend the cricket. The cricket tells Pinocchio that he’s not clever and that he will always be a puppet. Pinocchio tries to squash the cricket when Gepetto comes back. Pinocchio tells Gepetto that he wants to go to school and that he’ll work hard. Gepetto gives away his jacket in exchange for a book for Pinocchio.

Pinocchio doesn’t say thank you or goodbye to Gepetto and heads off to school. On his way, he hears some carnival music. He is conflicted about whether to go to school or stay and listen to the music. He decides that school can wait and goes to follow the music.

The music is coming from a puppet show. Pinocchio sells the book Gepetto got him in exchange for entrance to the show. The puppets Punch and Judy throw a bundled baby back and forth. The baby gets thrown into the ‘audience,’ and Pinocchio catches it. Punch invites Pinocchio onto the stage. The boss Showman realizes that Pinocchio would be a special attraction as a puppet without strings. Pinocchio gets cast as a pirate, and he becomes a full-blown fighting pirate. Everyone claps for Pinocchio, and the Showman invites him to stay with them since he’s the best puppet pirate they’ve ever seen. Pinocchio tells them that he doesn’t want to be a puppet; he wants to be a real boy. The Showman puts Pinocchio in a cage.

Punch and Judy tell Pinocchio that if he starts crying, the Showman will let him go because crying makes him sneeze. They teach him how to act like he’s crying, and it works. The Showman sneezes and lets Pinocchio out. Pinocchio tells him that his papa is so poor, he had to sell his only coat to buy him a book. The Showman feels bad and gives Pinocchio five gold coins.

On his way home, he runs into Fox and Cat. They are pretending to have injuries so passersby will give them money. They hear Pinocchio’s coins jingling and plan to swindle him out of his money. Pinocchio tells them that he’s going to buy his papa a new coat and himself a schoolbook.

Fox and Cat tell Pinocchio that he can turn his five coins into ten thousand coins if he comes with them to Tricksville and the Field of Miracles. Before they head out, though, they invite Pinocchio to join them for supper. They plan to have him pay for dinner and then steal the rest of the coins from him when he’s asleep. The Fox and Cat have a large supper, and everyone goes to sleep. Fox and Cat wake up and try to find the gold coins when the Innkeeper comes in. They run off, and Pinocchio is left to pay for the supper that they ate.

Against the Innkeeper’s advice, Pinocchio goes off to find Fox and Cat, thinking that they are his friends and they will help him get rich. Fox and Cat are disguised along the road and tell Pinocchio to give them his money. He puts the coins in his mouth. They try to tickle him and shake him, but he won’t open his mouth. It starts to snow, so they tie him to a tree. They’ll come back later when he’s so cold that his teeth chatter.

The painters realize they need a fairy. One of the painters ties a jacket around his waist for a dress, puts on a mop for a wig, and picks up a paintbrush for a magic wand. The Fairy gives Pinocchio some medicine, but he refuses to drink it because it smells funny. The Fairy gets the audience to help count to three to get him to drink it. Pinocchio feels much better.

The Fairy asks Pinocchio why he didn’t go to school, and he lies. His nose grows 12 inches. The Fairy tells him that the nose won’t get small again until he tells her the truth. He lies again, and the nose gets even longer. Finally, he tells the truth, and his nose gets small again. The Fairy tells Pinocchio to go home and tell his papa the truth. She tells him to take the path over the hill and not go through the woods.

At the fork in the road, the Fox and the Cat are there waiting for him no longer wearing their disguises. They convince him to go with them into the woods to bury his gold coins in the Wood of Miracles. They tell him to bury the coins and come back in 15 minutes. When he comes back, the coins will have grown into a tree full of coins. Their plan is to steal the coins when he is not looking. Just like Pinocchio, the audience is given 15 minutes to take a little break for intermission.

After intermission, Pinocchio looks for his tree of gold coins only to find that his coins are gone. He realizes that the Fox and the Cat were not his friends and had tricked him. Pinocchio then sees Gepetto on a boat being tossed by the waves. Pinocchio wants to go out to him, but he is restrained by the other painters. The painters sing about how the ‘poor puppet’s papa has passed away.’

Pinocchio believes that his papa has died and decides to finally go to school. He believes that if he becomes a real boy, his papa will come back. At school, two other kids tease Pinocchio. He meets Lampwick who shares that he’s going to go to Playland. Lampwick invites Pinocchio to go with him. A stagecoach arrives to take Lampwick to Playland. They convince Pinocchio to go with them. When they arrive, we see children playing everywhere – charging about on brooms, sword fighting, dancing, skipping rope, playing tug of war, etc.

Five months pass, and Pinocchio is happy. One morning, Lampwick wakes up with donkey ears. Pinocchio laughs at him, but Lampwick is really scared. Then Pinocchio’s ears turn into donkey ears. Both boys start to have their legs change as well and begin kicking like donkeys. The Coachman comes and tells them that this is because they didn’t go to school and didn’t learn anything. They are no better than donkeys so that’s what they’ve become. As donkeys, it’s now their job to pull the stagecoach and bring other naughty boys to Playland.

Donkey Pinocchio runs away until he comes to the edge of a cliff. Before the Coachman can catch him, he jumps off the cliff into the sea. Underwater, the fish come and nibble off all of the donkey parts leaving Pinocchio as a puppet once more. Pinocchio swims away right into the mouth of a whale.

Pinocchio is in the belly of the whale and finds Gepetto there! They make their way up the whale to its mouth, but Gepetto is too scared to jump back into the water. Pinocchio makes the whale sneeze, and they both get blown out into the sea. Pinocchio swims and pulls Gepetto to safety on the beach.

Gepetto is very weak and asks Pinocchio for some milk. Pinocchio doesn’t have any and doesn’t know what to do. The good fairy comes but isn’t able to make milk appear for Pinocchio. An Old Man offers to give Pinocchio a cup of milk if he fills up ten buckets of water for him. It’s a hard task, but he manages to complete it, and with the milk, he saves his papa’s life.

From that day on, everything he did was for his papa. He earned enough money to buy Gepetto a new coat. He worked hard to learn to read and write. Months later, Pinocchio wakes up to find that he is a real boy. The painters share a group hug to celebrate their work telling the story together.