The story of Pinocchio starts off with a man named Geppetto finding a magical log in front of his house. He begins to carve out a puppet and names it Pinocchio. Surprisingly, the puppet magically comes alive and has a life of his own. Geppetto decides to sell his coat to purchase a variety of schoolbooks for Pinocchio, but this puppet is more interested in exploring the world through his many new adventures.
Pinocchio decides to join a puppet theater and almost gets eaten by the gigantic puppet master. Pinocchio begins to lie about this situation, and the puppet master then rewards him with five gold coins. Pinocchio meets up with two crooks who do their best to fool him by telling him that he'll grow a money tree if he plants his coins into the ground. After this happens, the Blue Fairy has been keeping a watchful eye on him. She saves him from his mischievous ways. She tries to give him some medicine to take, but Pinocchio lies about wanting to drinking the medicine, but the Blue Fairy wouldn't allow him to. The more Pinocchio lies, the longer his nose will grow. He then promises to the Blue Fairy that he will try to be on his best behavior.
Unfortunately, Pinocchio goes back to his mischievous ways again and is sent to jail for his involvement with Fox and Cat. A few months later, Pinocchio is set free and finds the grave of the Blue Fairy. He finds out that she died of grief due to his mischievous behavior. He later finds the Blue Fairy on the shore after trying to save his father from drowning in the ocean. She is alive and well, ready to forgive Pinocchio for his evil ways.
As Pinocchio tries to reunite with his father, they are both swallowed up by a whale. They try to escape together from its belly. The Blue Fairy notices a remarkable amount of courage in Pinocchio and grants Pinocchio's wish of becoming a real boy. Pinocchio goes to school as a newly changed boy, enjoying his life while noticing his shadow, which is still in the shape of a puppet, chasing a butterfly in the wind.